National Assembly for Wales

Can I welcome everybody to this hybrid meeting of the Senedd Petitions Committee today? As a reminder, the meeting is being broadcast live on Senedd.tv, and the Record of Proceedings will be published as usual. Aside from the procedural adaptations for conducting proceedings in a hybrid format, all other Standing Order requirements remain in place. Item 1 on today's agenda: apologies, substitutions and declarations of interest. There are no apologies, and can I welcome all Members, either virtually or in the room with us, to today's proceedings? And I should also remind committee members that they should note any declarations of interest either now or at the relevant point during today's proceedings.

Okay. Item 2 on today's agenda, the first of today's evidence sessions for P-06-1326, 'The Senedd should scrutinise the prepayment meter scandal in Wales'. I'm pleased to have Neil Kenward from Ofgem here with us today. Perhaps, Neil, you could introduce yourself for the record, to start.

Of course, Chair. As you say, Neil Kenward; I'm the director for strategy and decarbonisation at Ofgem.

Mr Kenward, I'm very grateful for your time. This is a serious matter that we're scrutinising in front of us today and considering on behalf of the Petitions Committee. I think it's fair to say that what we have seen over the last year is nothing short of a national scandal, as the petition suggests, when it comes to energy suppliers forcibly installing prepayment meters into the homes of some of the most vulnerable in society. It's my understanding that, as Ofgem, they are the regulator of these energy firms, and I think it would be a fair assumption to say that you are there to stand up and protect consumers, and that perhaps—it's my opinion, and I won't preempt any committee opinion on this—last winter, Ofgem didn't do that. Instead, you let some, or many, vulnerable people down. But perhaps, to open questions this afternoon, before we take questions from other members of the committee, can I ask: how did we ever get into a position where residents, not just in Wales, but across the United Kingdom as well, including many, many vulnerable households, were forced onto prepayment meters? I think the figures suggest that, last year alone, there were over 94,000 enforced installations of prepayment meters in the United Kingdom, for 2022. Why was that so high?

Thank you, Chair. I should start by saying that I agree entirely that this is a really important issue, and that Ofgem's remit is absolutely to protect consumers—that's what we exist to do, and we have particular roles with respecting the vulnerable, and our board take, and our executive take, that issue particularly seriously. Indeed, in the run-up to this winter, at this period when we knew energy prices were at record levels, we knew that that was going to put extra pressure on consumers across the board, but particularly the lowest income and the most vulnerable consumers. So, over the last summer and into the autumn, we were running market-compliance reviews, which are, essentially, audits of the entire energy supply sector, on issues like their preparedness for vulnerability, on issues like how they help consumers who are struggling with their bills. So, we ran a very comprehensive set of audits into that issue. And then, recognising that there could be a particular set of concerns around the installation of prepayment meters, in November, the director for retail—one of my colleagues, Neil Lawrence—wrote a very robust letter to all suppliers, reminding them of the rules and their obligations, which include the need to protect vulnerable consumers, and to only install a prepayment meter where it's safe and reasonably practicable to do so. And we had very clear rules about that at that time.

We also launched, earlier this year, a market-compliance review targeted specifically on this issue of PPM installation. We realised it was important for consumers, but also an issue of considerable public interest. And of course, when The Times investigation broke, we launched immediately an investigation into British Gas, which is ongoing. We also have broadened out—we're conducting audits, independent audits, of all the suppliers and their prepayment meter practices. And we asked all suppliers to stop all involuntary PPM installations for a period whilst we conducted the audit and whilst we reviewed the rules. And so what we’ve been spending a number of weeks doing was developing a new code of practice, which we’ve now published a few weeks ago, which sets out very clearly our expectations and defines in much more prescriptive terms than previously when we believe it is safe and reasonably practicable for a prepayment meter to be installed. So, we’ve tried to remove any sense of doubt about when it is and isn’t acceptable, to ensure that all suppliers meet the high standards that we have always expected of them.

Thank you, Mr Kenward. I think it's fair to say at the start that suppliers over the last year did not meet any standard—high standard or gold standard—that, as a consumer, we would expect Ofgem to protect. I have questions, but I'm conscious Members have questions as well, so perhaps we'll move straight to Rhys ab Owen first. 

It's not actually a question I wanted to ask, but I was just thinking, whilst you were answering questions to the Chair now: what about people who were affected years ago, many years ago? They've already gone through the complaints procedure, they've already gone to the ombudsman, it has been turned down, and now they want to re-open their case. How are they to be supported?

We do have, as you say, rightly, a complaints procedure in the sector. Consumers should first try and get their problems sorted with their energy company, but if that’s not satisfactory then there are avenues like Citizen’s Advice and the ombudsman where they can lodge their case, and those cases that can’t be resolved through those routes, we talk to Citizen’s Advice and the ombudsman on a very regular basis and they pass us the difficult cases that we can then take forward and resolve with the suppliers. 

I was thinking of cases that have gone through the procedure years ago, before this became a well-known issue on the agenda. How are these people to be supported, who've already gone through all the procedures and been rejected by the ombudsman already. What can we tell constituents who are in that category who get in touch with us?

So, if there are consumers who are on a prepayment meter and they don’t believe it’s safe for them to be on that, and they think they’re coming to serious harm as a result, they should absolutely get back in touch with their supplier and tell them that they think they have vulnerabilities or other issues that make it not safe for them to be on a prepayment meter. We would absolutely expect a supplier to then revisit that decision and, if appropriate, return them to a non-prepayment form of metering.

Thank you. I want to move on to the code of practice. As we all know, it's a voluntary code of conduct. Where are you about making it legally enforceable? 

Yes, that's absolutely a top priority for us. What we wanted to do was act quickly, and the quickest thing to do was to suspend all non-voluntary prepayment meter installations, which we did immediately, and put out a code quickly. So, we’re setting out clear new rules that have to be met. There’s complete clarity now on what is and isn’t acceptable. But we recognise that, at this point, it’s a voluntary agreement. Now, we’re pretty sure the suppliers will be really keen to not break any of the new rules, but, to make absolutely sure, we’re moving at pace to put it into the supply licence, at which point it is fully enforceable. So, that takes a little bit of time, and it does require a consultation to make changes to the supply licence, so that process will happen over the next few months. We are determined to get the new code into the licence so that it is fully enforceable before the winter, and we think that’s the right sort of timeline. It enables the proper, consultative process to occur. But I think that should give some reassurance, and I can be really clear that we will be monitoring the industry even before it’s in the licence, to make sure they’re adhering to the code.

Okay. So, your evidence is that it will be legally enforceable before next winter. 

Before the coming winter, yes. 

Thank you. I just wanted to look at the different categories of risk. Now, high risk—the age limit for that has been set at 85. I'm not sure whether you know that the average age of death of a Welshman is 78. Why has it been set seven years older than the average age of death of a Welshman in Wales?

So, we consulted a number of sources in terms of medical advice and other bits of guidance that set these limits. One of the things I'd say is that it's actually very difficult, and we recognise it's very difficult, to draw a line and say, 'Everyone over the age of 85 is somehow too vulnerable for it, and people under the age of 85 aren't.' But we had to provide some clarity, and what we require suppliers to do is, for every household that they feel that they need to install a prepayment meter in, they absolutely need to check the individual circumstances of that household, and, if there are any of the vulnerabilities that we have set out in our code, then they should not be going ahead with the installation. So, our priority absolutely is protecting vulnerable consumers.

But how is that to work in practice? Say now, for example, somebody could be in the medium-risk category who's 84, with Alzheimer's, with Parkinson's, with schizophrenia. How on earth are energy companies expected to assess these people to see whether it's safe and reasonably practicable for them to have a prepayment meter? 

That's one of the reasons we've put in the precautionary principle. If there are people in that category who are vulnerable and cannot afford, or may struggle to afford, their energy bills—so, if they're at risk of self-disconnection—the rules are clear in the new code: they shouldn't install a prepayment meter.

But how can it be assessed, then, that's it's correct to give a prepayment meter to somebody in a medium-risk category who has an illness like Alzheimer's or Parkinson's? Are these energy companies supposed to send out a medical expert to assess these people individually? I'm just wondering how it actually works in practice.

So, it's something we already expect them to do, and, indeed, most of them do have these processes to make assessments. We would expect them to have enough expertise within their organisation to judge the vulnerability of these households and to judge whether it is safe and reasonably practicable. In my view, an 84-year-old with Alzheimer's does not sound like someone for which that would be an appropriate step to take.

The difficulty, of course, is that every household is different and has its own circumstances. There might be other capable adults in the house, for example, which would change the picture. So, what we've tried to do—. As I say, we'll be consulting on the details of this over the summer, so we're very open to continued conversation with consumer groups and charities, and, indeed, politicians and Governments, because we have been already having a good dialogue with consumer groups, and they've informed the rules we've set so far. But we will continue that dialogue to try to make sure we get it right. This is—. I mean, it's genuinely a difficult area.

But, at the moment, you're unable to tell us exactly how these assessments should take place.

So, in a sense, what we require is that the assessments take place in a way that is done professionally and informed by experts—people who know how to make these assessments. In a sense, it's not for Ofgem to say exactly how something should happen in that regard, but the suppliers must demonstrate that they are able to conduct proper vulnerability and affordability assessments.

Diolch yn fawr, Rhys. I'm going to bring Luke Fletcher in now, but, just to point to the 85-year-old age group that you've drawn a line under, I think it's noted that the NHS say that, if you are over the age of 65, you should not allow your house to go below 18 degrees C—3.2 million people were disconnected last year; some of them were going to be over the age of 65. I will, perhaps, pick up some more of this after Luke Fletcher. It worries me—it deeply concerns me—that 85 is not perhaps the right figure, and the consultations might want to look at that. Luke Fletcher.

Diolch, Gadeirydd. You actually brought up a point that I was going to bring up anyway, but—. You mentioned that some campaign groups and consumer groups have informed stuff around the new code, but a lot of campaign groups have also said that the code doesn't go far enough. For example, coming back to the example of a person in their early 80s, under the new code they could still be, potentially, exposed to prepayment meters being forcibly installed. In fact, Tom Marsland, from the charity Scope, said that the changes would still allow energy companies to install prepayment meters in some disabled households. How would you respond to that, then?

We're really clear that, if the household has a vulnerability where that person has a medical need for a warm home or continuous electricity supply—for example, to run a dialysis machine or things like that, which often are in people's homes—then a prepayment meter is just never an acceptable option, and, actually, we're asking suppliers to check existing PPM households to make sure that people are not in that situation. We've set out really clearly the sort of test, how they should be looking, what factors they should be looking for, around disabilities and other vulnerabilities that should determine whether it is safe and practical for a prepayment meter to be in someone's home.

Of course, this comes back to the point that my colleague Rhys mentioned earlier, around how do energy companies assess that themselves, and you mentioned that you would expect them to have a certain level of expertise around making that decision. How would you define that expertise then?

So, what we've said is that, for example, there should be a welfare officer who is available either on a site visit or able to advise on the site visit, and we're requiring mandatory site visits ahead of prepayment meter installation or indeed a remote switch, which is, in a sense, the same thing. But there has to be a mandatory site visit, so that the actual circumstances of that household can be properly assessed in person. And people with the relevant skills, the relevant training, should be part of that site visit, and part of the installation team, so that there is proper evidence gathered and that prepayment meter installations don't go ahead if there is significant risk to the consumer. 

Thank you, both of you. Can I ask: are those site visits happening now, and are they being measured?

So, right now, there are no prepayment meter installations going on that aren't wanted by consumers. But, prior to that, there were different practices. So, for some suppliers, they did do those site visits ahead of every installation, and for some, they didn't. So, one of the things we can do with this code and the new set of rules is to bring every supplier up to the best standards that existed in the industry and make those standards mandatory, so we're enforcing best practice across the sector.

Thank you for that. Picking up Luke Fletcher's points and your response about medical devices, well, I can tell you that that has happened over the last year. In fact, I had a constituent of mine and I'll quote their words to me: 'A family member relies on a medical device that has to be connected to mains electric when in use. So, I would urge energy suppliers'—and we'll pick this up with energy suppliers afterwards—'to, as you say, look into that and make right what is quite clearly wrong there.'

If I can just bring some more scenarios to your attention, to just get some more reassurance for constituents of where this new voluntary code is at. The code of practice, as it is at the moment, of course, you stated would be mandatory before this winter. One example, and I'll quote again—this is evidence that I've had sent to me and my office: 'My husband is an army veteran, reconstructed ankles, PTSD, and many other health issues.' There's a further one that says, 'My friend who I live with is bipolar, diabetic and has many other health issues.' In those scenarios, under the new voluntary code of practice, would you expect them to be protected?

So, what we've asked is that people with serious medical, physical or mental health conditions and disabilities should have a proper assessment done of their vulnerability and affordability. And, on that basis, if it's not safe and reasonably practical for that household to have a prepayment meter fitted, then that should not go ahead.

Okay. I'm conscious of when the voluntary code of practice comes back in, what process will be in place to make sure that those site visits do go ahead? How will you measure them? Because I'm conscious that they may not go ahead and forced installations could start again.

Yes, so one of the things we're really keen to do is make sure we're getting input from consumers. We opened up a—. There are the normal routes that we talked about and I will talk about again, but we opened up during the period of this investigation, we did some work with Citizens Advice and opened a dedicated web form and phone line for anyone who's had a poor PPM experience to actually come forward and give us the details of those. That was open for a distinct period and it's now closed but we got many hundreds of consumers coming forward, which enabled us to then go to the suppliers and make those cases part of the audits, so that we can check on the details of each of those cases. Going forward, there are the routes that we've explained, so, Citizens Advice and the ombudsman, and if a consumer is not getting the treatment that they expect or that they believe they deserve through the rules, they should raise that concern. It comes to us if it can't be resolved and we can step in and require the supplier to take action, so we will also be doing, in addition to that, continued monitoring. So, we'll come back to this issue repeatedly. We will check on suppliers' own complaints data. We will check on the case loads that get referred to us by other charities as well. So, we have a number of routes by which we can really try and keep track of what's happening on the ground and take action if needed.

Okay. Joel James.

Thank you, Chair. Thanks ever so much for coming in this afternoon. I just wanted to ask one question, really, on data collection. It's come up in previous sessions, when we've talked to Citizens Advice and National Energy Action Cymru, and they've highlighted almost the wealth of information you've collected from energy companies regarding this. I just wanted to know how much of that, really, is shared with the Welsh Government. Have they requested any data? Do you share that with them, then?

I'm not aware exactly whether that data is shared with the Welsh Government, apologies. We can look into that for you. I should say that I've had two meetings with the Minister for Social Justice, Jane Hutt, to discuss this very issue of prepayment meters, recognising the importance that it carries for Wales and the Welsh Government. So, I have that dialogue with the Minister and, indeed, here in front of this committee, and I'm very pleased to be able to continue that conversation.

So, with that in mind, then, in terms of sharing that data with the UK Government, what sort of interaction have you had with them regarding that? What outcome has this achieved?

We have our own processes for resolving issues in the energy sector. We of course talk to the Government in Westminster as we do the Government here to make sure that the Governments' concerns—and, indeed, in Scotland—their concerns we understand and we're able to address them wherever possible. I wouldn't say that we share complaints data with governments. That's not the standard practice, but we have a deep and continuing dialogue with all the key governments across the UK—or GB, I should say.

Thank you, Joel. If I can take us back to earlier, when you said energy firms are not forcing entry into homes at the moment, under the moratorium. I'm just reading a piece from The i newspaper from 11 May, of last week, which says,

'Energy firms are still forcing entry into homes, but Government officials don't know why. The Ministry of Justice has confirmed it still doesn't keep data on why energy firms and their agents request warrants to force entry into properties. Energy firms and their debt agents are still being handed the right to force entry into homes and businesses without Ministry of Justice officials keeping a record of why the warrants are being granted.'

What is your assessment of that, then? Is what I've just read out correct or not?

Shortly after we agreed with the sector that they wouldn't pursue any more installations by warrant, the courts, I believe, also suspended their processes in England and Wales, and, to my knowledge, those are still suspended. So, this might be a sort of legacy of stuff that was started before that suspension. With apologies, I'd need to get more of the specifics, but we can very much look into that. There shouldn't be any prepayment meters being installed in homes for customers who are not willing for that to happen. That shouldn't be happening at the moment, because the voluntary suspension remains in place.

I'd be very grateful if—and I understand that you won't have that detail in front of you now—following today's proceedings—. This article goes on to say, following a freedom of information request,

'that courts have granted more than 13,000 warrants since 6 February',

which is when the courts wrote to—

I'll definitely look into that and write back to you, Chair. It's possible that that's bailiff action that's not related to energy bills, but I'm not entirely sure. The pause, I believe, from the courts referred specifically to energy bill warrants rather than standard debt recovery through bailiff action, which would be a separate process.

It's still a problem, though. 

Yes, but not one that the energy regulator is involved with, I'm afraid. But we can definitely look into that and get back to you.

I'd be grateful for that, Mr Kenward. If I can move to Buffy Williams, online.

Thank you, Chair, and thank you for joining us this afternoon. So, we all know that the water industry isn't allowed to disconnect people. Do you think the same idea could work for energy?

That's a great question. So, we have—. Energy suppliers currently have the legal right to recover energy debts and the bills owed to them by their energy consumers. That right's actually existed since the 1950s, when it was a publicly owned industry, and it's so that people pay for their energy and those debts don't have to be recovered and socialised and recovered from other consumers. Now, you're absolutely right that, in the water sector, people can't be cut off. And in the energy sector there's been a sort of evolution where originally there was that risk of disconnection, and, actually, prepayment meters were introduced partly to prevent either disconnection of energy, or bailiff action, where people would go in and take possessions, as you can imagine, to recover moneys owed. So, prepayment meters have historically been considered an improvement on the alternatives, given that energy suppliers have the legal right to recover their energy debts. Now, to change that is not in Ofgem's gift; it would be a Government decision, because it is set out in law as it stands at the moment.

So, we're in a situation where they have that right to recover their energy debts. The prepayment meters are the preferred method, because they enable continued energy consumption, but we have constrained that right. We've recognised that for vulnerable households and vulnerable consumers actually there are circumstances in which it's not acceptable to have that risk of self-disconnection, and so that's why we had rules in place previously and why we're bringing out this stronger, more robust code and licence conditions to make sure that the most vulnerable in our society are properly protected and that there is no risk of self-disconnection. It's important to say that that will probably lead to higher bad debt in the sector, and that will be a higher cost for everyone who pays their bills. So, right now in the water sector, there is a cost on everyone's bill from the people that can't be disconnected and don't pay their bills. Now, that number is small and we expect it to remain small in energy as well, but it is—. That's the sort of trade-off that we—. As I'm sure you'll appreciate, we have to manage that balance.

Thank you. What do you think would be the consequences of banning the forced installation of prepayment meters or banning them completely?

So, I think—. Building on what I've just said, I think the risk would be that bad debts in the sector would go a lot higher.

Now, I value, Chair, actually, the examples that you've given of constituents and other people who've written to you and told you of their difficult situations. One of the things we try to do in the executive in Ofgem is actually have conversations, have meetings, with a wide range of energy consumers in this country, so we understand on the ground what it feels like, what people are experiencing in different circumstances. Actually, I have to say, it wasn't set up like this, but I was speaking to a Welsh customer just last week who is disabled herself, she looks after an adult child who is also severely disabled and she lives with her husband who is also not able to work. So, they are very much the category of a seriously vulnerable, low-income household. And she has one of electricity and gas on prepayment and she wanted the other one to be put on prepayment as well. And I think it's really important to understand why that's the case. I asked her, and she said that it's because it gives her control over what she's spending; it enables her to avoid getting into an uncontrollable debt situation, which she wanted to avoid. So, she has that control.

We survey energy consumers routinely as part of our role in Ofgem, and, the last survey we did, two thirds of customers who have a prepayment meter believe that is the best option for them, and it's primarily—. And I've got the data here. The reasons they give for that are that they can control their spending, that they can budget more effectively, and that, for some of them, it gives them more—they say it's more convenient than other payment methods. So, that feels like an important bit of the evidence, and the Fuel Bank Foundation themselves said earlier this year that 80 per cent of their case load who are on PPM say that's their preferred payment method, and it's about giving consumers that control.

Now, what we would say in addition to that is two things: firstly, that it's—. There are some households for which we really don't think it's ever acceptable, because the self-disconnection risk is so high, and that's our high-risk category, if you like. It's a 'do not install' category. So, we would never want to see prepayment meters in those most vulnerable households.

The other thing we're trying to do through the code, and we will try and promote this further, is ensure that, wherever possible, a prepayment meter, if it is being used, is a smart one. So, that's basically a smart meter that can be put into a prepayment mode, and we think that's of real benefit to consumers. The vast majority of them find it easier to manage and to do the top-ups. They don't have to go to a top-up shop; they can do it through their smartphone. But they're also able to, if they are unable to afford the energy, and they self-disconnect, the supplier can see that on the system, and we've required the supplier to monitor that and to reach out immediately and contact that consumer and say, 'Why have you come off the supply? Is there anything we can do to help?' Some people, they go off to work, they turn off the supply, they don't need it on when they're not there, for example, but others may have real needs and may be really suffering and unable to afford their bill that day. And we have an obligation on the supplier to then offer emergency credit in those circumstances. So, a smart prepayment meter, we think can provide a more effective level of protection than the old-fashioned type that is still being installed in some cases and we want smart to be installed wherever possible, because we think it gives so much of a better experience and protection to consumers.

Can I bring in Rhys ab Owen?

I can see the control argument and I can see how that would be attractive, but what about the charges? The tariff charges, that's the one; that's the huge problem, isn't it? Even if they're not using it, they still have to pay the charges. Surely that can't be seen as fair or beneficial. Surely you can still have the control, but without the charges, couldn't you?

So, these are the standing charges that are incurred every day even if, like you say, you're not actually using energy. So, this is a feature of the energy sector, and those standing charges reflect the sort of fixed costs of the system, and one of our—. The way to establish is we should try and make charges cost-reflective where possible. So, there are those fixed costs that need to be recovered now. We do what we can as a regulator to keep those to a minimum, but we recognise they are there, and one of the things that concerns us at the moment is that they seem to be a bit higher for prepayment meter customers than for people on, for example, direct debit, which is the cheapest form of tariff. And we are doing work right now to look at whether we can equalise downwards, so remove that premium that PPM customers are paying on their tariffs, so that you would never pay more because you're on a prepayment meter.

And what's stopping you doing that now?

We are going through the process so that we can do it, and we are aiming to do it—

So, you will do it. It's a question of when.

Exactly. We're exploring what the right mechanism is to do it. The Government's actually committed to do it in the short run, I think from 1 October, but they've made that commitment. The Chancellor made that commitment in the budget. What we've said—. He's made that time-limited commitment until, I believe, 1 April next year. What we're committing to is to ensure there is a mechanism that, from 1 April next year, means that people on a prepayment meter won't be paying more than if they were on direct debit, which, as I say, is the cheapest form of tariff.

Thank you, Rhys. Buffy, I will come back to you. Why has it taken a scandal like this for just something as simple as looking at the social tariff and the standing charges for Ofgem, or—you can't answer for the Government, I'll give you that—but why has it taken a scandal like this for standing charges to be looked at by Ofgem? Because we've known for a while that they are predominantly the higher energy prices; we've known for a number of years that the most vulnerable people are on these tariffs. And the evidence from January 2023: 3.2 million people were disconnected last year. To put that in scale, that's one person every 10 seconds. It can't be right in this day and age in the United Kingdom for people to go without energy.

This is an issue we've always taken seriously. What has made it particularly difficult for everyone, millions of households, is the high cost of energy. And we've geared up actually quite a lot in the last 12 months to really focus—. We've grown our retail outfit, our monitoring, our compliance activity to make sure that we can do more activity here, so we can strengthen protections for consumers and really actively monitor, enforce across the board. So, that is a higher level of activity than we've undertaken before, and it reflects that affordability challenge.

I think it's important to say that Ofgem can deliver prices that—. We can prevent exploitation of consumers, but we can't tackle the high underlying costs of energy that come at the moment from that high gas price, obviously related to the Ukraine crisis. So, that is something that is beyond our ability to control or indeed to help with. So, what we do is call on the Government to introduce a social tariff or something similar, and the Government has said that they're looking at those sorts of options and we hope they will bring them forward.

And, in fact, of course, last year—last winter—there was unprecedented levels of Government support for people with their energy bills. Now, we're hoping this winter won't be as severe in terms of the costs—we don't know for sure, but we're hoping it won't be as severe—but even this winter, we think further support is likely to be needed, and so, we have been calling on the Government, and indeed working with them, to try and ensure that a suitable mechanism can be put in place.

Okay, thank you, Mr Kenward. Buffy, any further questions from you?

I was just going to say, if I step back into my community shoes, we have an extreme amount of people coming to us at the moment, who are suffering fuel poverty. What do you think, or what would you suggest that the third sector does when they have an extreme amount of people coming to them who are afraid to report that they are suffering with fuel poverty? Because they don't want to be put onto a prepayment meter, and they don't want to be cut off, and they don't know where to go. And this is something that is happening on a daily basis.

Yes, and, look, we recognise the intense pressures that the cost-of-living crisis is putting on millions of households across the country. And what we would—. The third sector plays an incredibly important role. We have a very regular dialogue with charities and consumer groups, including many of the ones mentioned in the room today. They're then able to tell us what they think we can do, and we would encourage consumers to reach out to those charitable organisations. So, Citizens Advice, for example, have their extra help unit. You can get things such as foodbank help; it can be referred, et cetera. There are lots of things that those groups can do, and there are charities that provide specific advice on energy, that would give consumer advice on how to keep their energy bills as low as possible, what's the best tariff for them to be on, and how they can navigate any problems they're having with their energy supplier. So, there's definitely support out there.

Now, I recognise those charities themselves are actually seeing a real surge in demand for their services, which I completely appreciate. I'm afraid that's a problem that's beyond Ofgem's ability to solve. But we're fully supportive of and, as I say, engaged in a continuing dialogue with those organisations.

I just wanted to note that it's more than just a surge in demand; it's also coupled with huge cuts to services. Citizens Advice, for example, has seen an average cut of 10 per cent in their funding. So, it's not only that they see—. Trying to get a constituent to have a meeting with Citizens Advice is very, very difficult, and Citizens Advice is one of the better-funded advice services. Other advice services have been completely decimated and closed, so that's also a huge issue. Sorry, Chair, I just wanted to put that on record—it's more than just the increase in demand.

Diolch, Rhys. Buffy, any further from you? No. You were muted, but I think I understood the direction of your head movement. Okay, Luke Fletcher.

Diolch, Gadeirydd. So, thinking about those now who have seen prepayment meters forcibly installed, will Ofgem now be going to energy providers and telling them to uninstall those forcibly installed prepayment meters? I mean, are consumers going to see some sort of compensation?

So, what we have—. So, as I say, we're doing independent audits of all the suppliers, and it's focused on prepayment meter installations over the previous 12 months, and if we find any non-negligible level of false installation—so, installations that should not have gone ahead under the rules—then we will absolutely be requiring the suppliers to offer the prepayment meter to be withdrawn and the individuals to be compensated. So, that's absolutely part of it. And their boards need to commit to doing that before we will sign off on them restarting prepayment meter installations.

So, is that based on the old rules, or the new rules that have been put in place?

That'll be based on the old rules. But we're also asking them to look at their entire stock of customers with regard to the clarified, strengthened rules that we're bringing forward through the code and to review all of those and to make sure that there aren't people in that vulnerable circumstance heading into this winter. So, we've absolutely asked them to make those checks so that we are removing that high risk from the system.

We established that the old rules weren't sufficient, in that sense, and I am hearing a lot of words like, 'We're going to ask them'—why not demand of them?

So, the slight difficulty is that we don't have the legal right to stop them installing prepayment meters, but they have all suspended them and they have all signed up to the code, and they have all signed up to the conditions we've set that they can't restart until they've satisfied ourselves on a number of different things, and one of those things is that they will be reviewing all their customer base to ensure that they're safe.

I suppose what I'm trying to get at here is: how can consumers trust that something like this isn't going to happen next winter or the winter after that? I mean, we had you saying earlier that Ofgem knew that this winter, or the winter that's just been, was going to be tough on a lot of people, but all I seem to have heard in terms of Ofgem's response to that is that you decided to send a letter to the energy companies just to remind them of the rules, rather than proactively trying to go out and solve the situation, as it were. I mean, it doesn't give a lot of confidence to consumers when there doesn't seem to be any power with you guys to actually get to grips with the situation.

We do have a lot of power. Through the market compliance reviews that we did last year, we identified over 100 different actions that individual suppliers needed to take to meet the sort of standards that we were expecting, and we're obviously tracking and making sure that they make those changes. So, the current market compliance review on PPM installation will undoubtedly throw up another significant number of actions that we will require energy suppliers to take. So, we are robust and we are absolutely clear what we need to do, which is to protect energy consumers.

We had previously taken what I call a principles-based approach, so we set a really clear principle and we provide guidance, but we don't specify individual households and individual specific medical conditions, because it's very difficult, as we've already discussed in this meeting today. Now, what became clear through the winter was that, actually, there was a case to be more specific, and actually both consumer groups and suppliers themselves said, 'Okay, actually, now, we do need that greater clarity; we can't just leave it to individual suppliers to make these judgments.' There will always be an element of judgment, but Ofgem needs to provide more guidance, and so that's what we've been doing.

So, you're confident that we won't see a similar situation arise next winter. 

We will be monitoring the situation very carefully. We will be seeking and getting input from consumers, and if we're finding that the new rules are being broken, we will absolutely take action—robust action.

And in terms of what Government can do around this particular topic.

From my perspective, the most important thing is that they help with the underlying problem here, which is affordability. I think that's something we will continue to work with the Government on and call for them to take action on.

Thank you. I'll bring Rhys in.

Sorry, Chair. Just following on from, I think, your first answer to Luke Fletcher about reviewing the customer base: 12 months. So, is that the limit? If the prepayment meter has been forced 12 months ago, that's the cut-off point. So, if it's been there for longer than 12 months, it won't be looked at. Is that correct?

Yes. And to be honest, because—. So, there have been—whatever—200,000, I think, Chair, you mentioned at the beginning, PPM installations by warrant last calendar year. To audit all of those would be extremely expensive and time consuming. So, what we're doing is a mixed approach, where we are doing a statistically relevant sample of those for each supplier, plus we're asking them—not asking them, requiring them—to audit cases where there have been complaints. So, that, we think, gives us a good enough body of evidence. Now, if that audit shows that the supplier has actual problems in their systems and that they're making repeated error installations that should not have been made, then we will require broader reviews to—

So, further back than the 12 months.

Potentially further back, potentially a broader group, to find out whether wrongful installations have happened on a wider scale. 

Because reading the evidence from energy suppliers, they don't seem to think there is a real issue here; they think they've complied perfectly. So, that's what I was going to ask—you mentioned compensation, or you answered in the affirmative when Luke Fletcher mentioned compensation, who determines that level of compensation? Will it be you, or will it be the energy supplier? 

There are some standard guidelines that exist at the moment from the ombudsman, which will have a certain level of compensation, depending on the severity of the harm suffered by the consumer. So that's our standard response. We would use that as a guideline. So it's independently set, and then obviously, the supplier has to adhere to that level of compensation.  

Okay. Thanks.  

Thank you, Rhys. Two final questions from me: firstly, going back to Luke Fletcher's final question, Mr Kenward, on your confidence that we won't be in a similar situation next year, I think, you answered by saying that you'd be monitoring and taking action if your new rules are broken. I'm going to ask again: are you confident that we won't be in a similar situation next year? 

So, the problem is we can't be on every single doorstep for every single PPM installation. One of the things we're introducing in the code is that all the installation teams will need to have a recording device with them and on, and that device needs to record the interaction they have with the consumer and the installation of the meter. So, we think, in the same way that it can work in police forces, it provides that sort of extra evidence and actually encourages good behaviour by the installers. And if there is a dispute between the customer and the installer, and one says one thing and one says another, actually, we've got some evidence, and I think that will help mean that, if there are disputes, if there are cases where we think there might have been poor behaviour or rules might have been broken, we will be able to obtain that evidence because we're going to require the suppliers to record it, but also hold that recording so that we can look at it as needed. 

That would put the emphasis on the consumer to complain. 

We are asking their boards—. In fact, we're requiring the boards of these suppliers to sign up to these new rules. They will be in the supply licence, they have an obligation to meet them, we will be monitoring them, we will be taking action if we find any breach of those rules. So, as a proactive regulator, I think that's the right posture for us to take.  

Okay. Thank you. A final question from me. We haven't touched on the energy price cap this afternoon, but have Ofgem ever discussed the possibility of raising the energy price cap to ensure that energy firms don't lose money through this voluntary moratorium that we have in front of us at the moment?

We're, actually, currently, right now, consulting on the bad debt allowance in the energy price cap. Now, the energy price cap—the intent of it is to prevent exploitation of consumers. So, they can't be charged more than the fair and efficient cost of providing the energy to them, but that does mean that they will be charged the fair and efficient cost of providing energy to them. So, if the cost of providing that energy goes up, then the cost that we allow through the price cap goes up. We've said that we'll look at the impact of these new rules on bad debt levels, and, if we think they're going to lead to higher bad debt levels in the sector, then we will have to increase the price cap modestly to ensure that those can be recovered by the energy suppliers. So, the objective here is a resilient and robust energy sector that's working for consumers, delivering fair prices, but is also profitable and investable for the companies involved, so that they want to be in the industry, they want to serve customers, they want to expand their customer base, and ultimately, they can make the investments needed for better services for customers, for the transition to net zero and everything else that's going on in the energy sector right now. 

Thank you, Mr Kenward. I think it's fair to say that the energy suppliers are extremely profitable at the moment. We might explore some of that in our next session with suppliers.   

With apologies for interrupting, if you're an oil and gas provider, like BP or Shell, or you are a wind power generator, if you're at that end of the energy chain, yes, they're making a lot of money, but, actually, the energy supply business, so the people who put the bills through your letter box for your electricity and gas, they've been loss making collectively for the last four years, ever since the price cap was introduced. So, actually, there's not a lot of surplus profit there at all. 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.

Thank you, Mr Kenward. Any further questions? Luke Fletcher, final question.

Perhaps a slightly unfair question to ask, then, but based on that final part of your final answer, is it that energy is viewed as something that companies should be allowed to make a profit on, or are we viewing energy as a fundamental human right in today's—?

I suppose Ofgem operate in the regulatory structure set out for us by Parliament, and that is a structure, since the 1990s, that has a privately run energy sector. Given that, our job is to regulate that to ensure that it can be competitive, that there's innovation, that there's good service for consumers. But that does mean profits. Without profits, you wouldn't have companies in the sector at all, and consumers wouldn't get a service. There are, of course, alternative models like the ones we had prior to the 1990s, but Ofgem is set up as a regulator for a private sector. So, that's the sort of framework that we inevitably operate in.

Thank you, Luke. Just finally from me, then, can you see Ofgem in the future—you've said you don't have the power to ban installations, you're signing up to the code, and so on. We talked about legislation like the water industry. Could you see Ofgem recommending to Government that they do need to change the legislation? 

I think, for us, the critical issue is this balance in that we absolutely expect to see vulnerable consumers protected. That is a top priority for us, and we are taking action on that, as we've discussed today. A complete ban on the use of prepayment meters—for us, we'd have to look at what does that mean. What's the alternative? If it meant that energy suppliers went back to disconnections or sending in bailiffs, for us, we don't think that's an improvement for consumers. So, it's about getting the right balance in this space, and I think, ultimately, that feels like a political judgment, but what we're doing is trying to make the existing system operate as best as possible and making improvements in it whenever we have the opportunity to do so.

Thank you, Mr Kenward, for your time today. I'll call this session to a close. There will be a transcript of today's proceedings that will be sent to you and shared with you, if you could check that for accuracy and make any amendments through the clerking team—

I will do, thank you.

—if necessary. We may have further questions once we've considered the evidence. So, we're very grateful for your time today, I must say, but we may wish to seek further assurances from yourself and Ofgem, as well. Okay then, at this point, I'll move to item 5.4 on the agenda today, before we go into a quick break before the next session with the energy suppliers. Mr Kenward, diolch yn fawr iawn.

Thank you.

Moving to item 5.4 in a slight change to the agenda we have in front of us. Item 5.4, P-06-1294, 'Don't leave metastatic breast cancer patients in Wales behind'. This petition was submitted by Tassia Haines, with 14,106 signatures. Tassia is joining us in the public gallery today, and I had the pleasure of meeting with her again before the session this afternoon. I think I've said the words before, a simply remarkable, incredible woman, Tassia is. Tassia handed me a very powerful illustration of some of the reflections that metastatic cancer patients have. I'll share this with committee members after today's session, so you too can see it. But for now, I will bring Buffy Williams in to discuss the petition and any actions we may wish to take.

Thank you, Chair. I think this petition has touched the committee from the very first time that we debated this subject, and we all met Tassia and her army of warriors, who I thought were absolutely amazing. I know that the petitioner has handed over an extensive briefing pack today that she would like to give to the health Minister, so I think, once that's been done, we would like to have a response from the Minister on that briefing pack. I'm aware that the petitioner would also like to meet with the health Minister, so I would be very grateful if that's something that our committee could facilitate.

Diolch yn fawr iawn, Buffy, for that. Any further comments on Buffy’s suggestion? No, I can see that Members agree with that, and I think it’s the right way forward. We will write, with Tassia’s comments to committee, to the health Minister, to seek that response from her. But also, as Chair, I will urge the health Minister to find time in her schedule to meet with Tassia and hear the points that she has to make, directly from Tassia, who’s spent so much time and effort fighting for those patients with metastatic breast cancer in Wales. 

Okay, on that note, I’ll go to a quick break. We’ll be back at 3 p.m. for our next evidence session, so for now, we’ll go into private session.

Okay, welcome back, everybody, to this afternoon's Petitions Committee session here in the Senedd. We move to item 3—the second evidence session for P-06-1326, 'The Senedd should scrutinise the prepayment meter scandal in Wales'. We're joined by witnesses from our energy companies here in Wales—in the United Kingdom. Perhaps I could ask the witnesses to introduce themselves for the record.

Good afternoon. I'm Andrew Ward, the chief executive officer for Scottish Power's retail business.

Good afternoon. I'm Dhara Vyas, deputy chief executive of Energy UK, the trade association.  

And good afternoon, I'm Chris O'Shea, I'm the group chief executive for Centrica.

Diolch yn fawr iawn, all. Thank you very much for being with us today. We just held a session with Neil Kenward from Ofgem, and we're grateful for your time in front of us. We'll jump into questions shortly from Members, but perhaps first to set the scene of where we are and what we've seen over the last year, which, in my view, is nothing short of a national scandal that has been exposed, I think, by investigative journalists like Dean Kirby from The i newspaper, as one, like the journalist from The Times. It seems to me that you as energy companies were perhaps forced to concede wrongdoing. Because I look to Mr O'Shea here and British Gas; you were perhaps caught red-handed in forcibly installing prepayment meters into homes of extremely vulnerable people across the UK. That alone suggests to me that the industry cannot be trusted when marking its own homework, when it comes to protecting our most vulnerable in society.

Can I start questions before other Members come in by asking the same question as I asked to Mr Kenward from Ofgem? How did we ever get to a position in Wales and the United Kingdom where residents, including many, many vulnerable households, were being forced onto prepayment meters? And additionally, perhaps to Mr O'Shea and Mr Ward, why were the numbers in your firms so much higher? I think it was 25,000 for British Gas and 24,000 for Scottish Power, out of a total 94,000 in the last year of 2022. Perhaps I could look to Mr O'Shea first, who's there on my screen in front of me. 

Sure. Thank you very much, firstly, for inviting me here to give evidence. I think it's important to understand that, firstly, the installation of a prepayment meter under warrant is absolutely a last resort. We go through processes to try and contact customers, on average, 24 times, we try to contact customers without success before we install a prepayment meter under warrant. On average, the customers that we install those prepayment meters for had £1,255 worth of debt and they had been in debt for 449 days. To put it into context, a bill from our energy company, and I think from many others, has a 14-day payment term. We would not look to pursue an installation of a prepayment meter under warrant until at least that is 150 days, so at least the bill is six months old. And so, it's a very difficult situation that we're looking to manage.

What used to happen in the past, when the energy industry was nationalised, is people were cut off. What happens in other countries is people are cut off when they don't pay their bills. It's very difficult to see that that is the right thing to do. But it's also difficult because, I think as you know, the cost of non-payment in the energy industry is met by everybody else—the cost is smeared over those bills. What is difficult for us to do—at least in Centrica, and, I suspect, in other energy companies—is to differentiate between those who can't pay and those who won't pay. There's a lot of work that needs to go on, I think, going forward, with Government sharing information, sharing data, so that we can establish that a lot better, so that we can understand better how we help those people who cannot pay.

On your question about the quantum or the amount of prepayment meters at Centrica, we have around 25 per cent of the UK's energy market, and I believe that the numbers that you quoted there were about 25,000 out of 96,000 or so, so roughly in line with our market share. Again, for the prepayment meters installed under warrant, those numbers have not increased for us over the past three or four years, so there hasn't been an increase in the number of prepayment meters under warrant for Centrica, for British Gas, and those that we've installed under warrant, I would say, are in line with our market share. 

In terms of your point about marking our own homework, I would point out—and you had Mr Kenward on—that we are subject to extensive regulation. There's a question as to whether that regulation is effective, there's a question as to whether that regulation is well enough designed, but I don't think it's right to say that energy companies are marking their own homework. The regulations are very, very clear. This is why, when I saw the outcome of the investigation by The Times journalist, I ordered an immediate investigation so we could understand whether there were systemic issues in our use of the warrant process to install prepayment meters or whether they were isolated incidents. The result of that report is that we found no systemic issues. There is an independent review that's been ordered by Ofgem, which is being carried out by another firm. We await the results of that report. But it is very important to note that there are extensive regulations in this space. 

Before bringing, perhaps, Mr Ward or Dhara Vyas in, are you saying, then, the current regulations that you are subject to are suitable? 

I think, like anything, they can be improved. I think that there is a way—. What I wish would happen is that we have better information-sharing between Government agencies, and between energy companies, and other companies, so that we can understand exactly who is vulnerable. The definition of 'vulnerability' can undoubtedly be tightened up, but the ability of an energy company to determine who's vulnerable is more limited than the ability of, for example, the Department for Work and Pensions. So, I think there are, undoubtedly, improvements that can be made to this process; any process can be improved. And what we found in the investigation—and it was quite clear from the videos released by The Times—is that, on a number of occasions, our people, and the people acting on our behalf, did not treat our customers with the respect that they were due. That's something that I apologised for at the time. I apologise again; it's unacceptable.

But there are improvement areas in this process. And I think the biggest area that we can improve is to pull this back from energy, and look and see that there is a group of people in the UK, in Wales and Scotland and in England, who are unable to pay for life's basic necessities—energy, food, rent. And there needs to be, in my view, holistic solutions to what do we as a society want to about that, how do we want to handle it. This is not something that any one company can fix; it's not something that energy companies can fix. So, there are, undoubtedly, improvements in the overall process, but I wish, I hope, that it becomes a holistic solution across more than just energy. 

Okay, thank you. I'll bring Andrew Ward in, and, then Dhara, I'll come to you for the perspective from Energy UK. Andrew, same questions; your numbers are so high. And if I can say from the start as well, I'm conscious—. I thank Mr O'Shea for his detailed answer, but we have got a range of questions to get through by 4 o'clock, so I'm conscious that Members might want to interrupt as well. It's sometimes difficult online, but I hope that we're not being rude if we do that. Andrew. Mr Ward. 

No problem. So, yes, I think, back to the question, Chair, which is why we have so many meters being fitted, I think I agree with Mr O'Shea—we have a fundamental problem in the UK in recognising that some people just cannot pay for their energy. I'll go back to 2017, when Scottish Power first started calling for a social tariff, and I'll go back to April 2022—I'll just get my years correct—when I wrote to Ofgem and said 'Ahead of this winter, we have a real problem in this country, in that some people can't afford their energy bills', and, at that point, we could see energy prices increasing dramatically, so, signalling that we need to do something about this as a country, as a society, to recognise it.

Of the 24,000 meters that we installed throughout the UK, we had about 5 per cent of our warrants in Wales. So, we installed 1,305 prepayment meters in Wales through warrant. We have a really small percentage of customers right now—less than 10 per cent—who are actually paying a debt with the prepayment meter. So, again, we've got to put this into context around why we use prepayment meters. There are a lot of customers out there, and, as Chris said as well, you've got to distinguish between the 'can't pay' and 'won't pay' scenario. But, I think, when you look at what we're doing right now, I think the new code of practice is definitely an improvement. 

What I would say, though, from the Scottish Power point of view, is we were already following a lot of those steps that are now laid out in the code of practice. In particular, one such as attending the property before you actually do anything with the house, because one of the biggest challenges that we have is actually getting the customer to engage with us. That's one of the biggest challenges all suppliers face in the UK, because, quite often, when we're at that final step, that final hurdle, what you see is that the customer is struggling for a variety of reasons—we are often very much the last person that actually helps the customer to try and engage—and going to other third parties such as Citizens Advice for help. 

Thank you, Andrew. Dhara, any further comments from Energy UK's point of view?

I won't repeat what either Chris or Andrew have said, but I do think it's worth noting that prepay, as previous witnesses have discussed with the committee, prepay does play a really important role for a lot of people who have, in the past, found it a really useful tool to help them to budget, to help them understand what they're paying, to manage what they're paying, and also, to avoid bills. And, so, a lot of people have, in the past, chosen prepay, and do find it a useful tool. Particularly within that, I think we find that smart prepay users obviously have the most transformatory benefit, because smart prepay gives lots and lots of opportunities to manage bills, to understand what you're using and to top up in different ways. It's far better than an analogue prepay option. So, I think it's really important to acknowledge the value of prepay in this space. Also, there is a responsibility on energy companies to help people to manage debt and to avoid further debt build-up. So, prepay has, in the past, been very useful for that too.

Thank you. We'll move to questions from Members. Rhys ab Owen.

Thank you very much, Chair. From listening to the three of you and from reading Mr O'Shea’s helpful letter to us, I take it all three of you disagree entirely with the Chair's comments at the beginning that this is a national scandal, because from your evidence, Mr O'Shea, out of the sample of 321, only two forced prepayment meters were inappropriate. There really isn't an issue here at all, is there?

The thing for me is what is the root cause of the issue that we're facing today, and the root cause of the issue is there are a substantial number of people in the UK, in Wales and Scotland and England, who cannot afford to pay for life's basic necessities. You then look at companies like Centrica and British Gas, and you say, 'Well, what should those companies do?' The energy retail market, collectively, has made a loss in the past three or four years. We made £73 million last year in that business. After tax, that's £7.00 per customer. As I say, the average debt per customer who went onto a prepayment meter under warrant was £1,255. So, almost 200 profitable customers are covering that one customer. So, I do think there's a need for a national debate, but it's on how do we as a society want to deal with people who cannot afford to live with dignity, in my view. We try and do our part at Centrica. We put £50 million aside, voluntarily, last year to help customers that couldn't pay, including £10 million for prepayment customers. But there is a limit, and you could look and say, 'Well, does that even touch the sides of the issue?' So, I do agree with the Chair that there is a national issue to discuss—

Mr O'Shea, the Chair said there is a national scandal with regard to forced prepayment meters. You in your letter said that your review showed that only 0.6 per cent were inappropriate forced prepayment meters. So, do you disagree with the Chair that there's a national scandal with regard to this? Because from listening to all three of you, it doesn't seem that you think there's an issue with the forced prepayment meters.

I think that there's an issue with people who cannot pay for their energy. The question is how do we deal with that as a society. Previously, people were cut off. In other countries, people are cut off. Their supply is simply ended. Now, that is not something that—. We didn't cut anybody off in Wales at all last year. You can still cut people off for non-payment of energy bills, but it is very rare. We cut off 26 people in the UK last year for non-payment. That's usually where it's egregious, where it's complete theft, where you find things like cannabis farms and the like.

The solution at the moment is that prepayment meters are used for people that can't pay their debts. Then the cost of non-payment is effectively socialised through the price cap. The problem, as I mentioned, is that we can't distinguish between those who can't pay and those who won't pay. So, I do think there's a need for a debate to say, 'How do we as a society deal with those who cannot pay?' It's not something that would be sorted out by removal of forced fitting of prepayment meters. Because if you did that and people stop paying, then what is the answer? If you look at what Governments do, what local authorities do, they go to court to enforce debts—council tax debts, rent arrears. So, I think that if we want to make energy a special case and say, 'Energy companies cannot recover their debt’ then one of the issues is we then are forced to extend credit to people who we know can't afford it. In many other industries, that would be a scandal. So, I don't want to appear evasive, but I think it is a bigger issue that requires Government, policy makers, companies, and consumer bodies to get together and to actually figure out what we want to do. But we have to go beyond just energy. This is not just an issue with energy.

Okay. So, if there isn't an issue with forced prepayment meters, why have energy companies signed up to the voluntary code of practice by Ofgem?

The voluntary code of practice is something—. Mr Ward mentioned it; it's the same with Centrica. We contributed to the development of the voluntary code of practice with Ofgem, and a lot of these things we do anyway. So, the requirement is you've got to have at least 10 attempts to contact a customer. As I mentioned, for us, it's 24, on average, for customers before they have a prepayment meter fitted under warrant. I think that regulation is very important in our industry, and I think the voluntary code of practice is something that is really good, that we say, 'Okay, do we all agree the rules of the road? Do we understand?' Because what I saw in the investigation by The Times really disappointed me, and so I was happy that we could say, 'Okay, what do we as an industry want to do?' But it doesn't deal with the underlying issue of people not being able to pay their bills.

Okay. Mr Ward, with the code of practice, which I understand is due to be legally enforceable by the end of this year, by the winter months, how would energy companies assess whether, for an 84-year-old with Alzheimer's, it's safe and reasonably practicable for that individual to have a forced prepayment meter installed in his or her house?

It's a very, very, difficult scenario to assess, but I would start by saying I genuinely don't think energy companies are the best equipped to actually make such an assessment. I think the reality is that we are all in a position now whereby it's falling on energy companies to make the best assessment we physically can. I think the reality here is that there are other options with far more detailed data than an energy company can actually obtain that would actually prevent the need for a doorstep assessment, and that's a practical reality. And then, again, to prevent that doorstep assessment—. Because, remember, that's at the end of a very, very long journey. You would hope that that doorstep assessment is not required, because you've actually engaged with the customer long—

How would you stop that? How would you stop the doorstep assessment?

Well, there's lots of data. You've got the Department for Work and Pensions data, we've got our own Government entities that understand what your income and expenditure is as well; you can pull all those together. The Government can access the health information from customers. We could encourage customers, if need be, to engage with energy companies, because, quite often, we don't actually engage with them enough. Therefore, if we don't have the data and the customer doesn't engage with us, we have no option and we must go to the door to try and make that assessment.

I know my colleague Joel James will ask in greater detail about data and data sharing, which seems so blatantly obvious to me. But, say now we do reach the doorstep assessment, surely you must've thought it through. How are you, as energy companies, going to do it? Are you going to send medical practitioners and experts in Alzheimer's or Parkinson's or schizophrenia round to the door, or is it just an employee who's going to do that doorstep assessment? How will it work?

It's not practical to try and think about sending a medical professional to every single visit that you might want to do. I think the reality is the assessment has to be done upfront, as best we can, and then, on the doorstep, what we're going to make sure we do is that our people who will actually be on the doorstep are skilled and trained enough to identify certain scenarios. But again, you're speaking to the customer, you're wanting the customer to actually speak to you and volunteer some of the challenges they have as part of their lifestyle. What we are going to do also is we're going to have an independent who sits there, ready to support anybody on the doorstep. So, if in doubt at all, we'll err on the side of caution with any installation that we have, and I think that's the most prudent and sensible way to do it.

Thank you, Rhys. Mr Ward, can I assume, with what you've said—? You said at the start that energy suppliers perhaps aren't best placed to decide if someone's vulnerable or not, and it's quite a difficult thing to do. Would you agree with the assessment that debt collection agencies are certainly not the right people to decide whether people are vulnerable or not?

I think you have to look at who is actually going on the doorstep. If you take a banner of a debt collection agency—. You could look at the banner of any professional body that sits here and say there are people who are skilled differently than others. I think, from a Scottish Power point of view, we want to make sure that the people representing Scottish Power are fully skilled, and they’ve got the ability, because they don’t want to make a mistake either, believe me. So, we want to make sure they’re skilled enough to actually make that assessment to the best of their judgment. As I say, the reason why we want to put a second, a third, a fourth, if needed, process in step is to make sure these evaluations are done with as much detail, as much rigour as we can. So it’s not just about the person on the doorstep, there’s another entity that will support that person as well—so, both parties independently, and they will both be skilled, as best we can. 

So, will Scottish Power continue to use debt collection agencies? I note, Mr O'Shea, in your letter to committee, you say British Gas won't be using them anymore. I can see you're nodding to confirm that. Scottish Power will continue to use debt collection agencies.

Yes, we will. The debt collection agencies that we're using are agencies that we've used for a very, very long time. We've got a good relationship with them, and we actually go through a long, extensive period to make sure those agencies are trained sufficiently. 

Thank you. Joel James, a supplementary question.

Thanks, Chair, and thanks, everyone, for coming in online this afternoon. I just wanted to pick up a question the Chair was asking about debt collection, and especially with you, Andrew, about the debt collectors that you use. Can I just have some clarification on that? For example, I know that there are some debt collection agencies out there who almost purchase the debt off you, and then pursue it themselves. I was just wondering, is that a model that you use? Or are the debt collectors that you use purely getting the debt to come back to you, if that makes sense?

Exactly. The last option is exactly what we do. That debt resides with Scottish Power, and they work on behalf of Scottish Power. Our teams work very closely together to make sure that we engage with the customer as much as we can. 

Thank you. 

Thank you. I'll come to Dhara to ask the same question now. Dhara, you seem to be pink on our screen here. 

I know. I'm very purple, I'm so sorry. 

It's fine. We can hear you and you can hear us fine. We just wanted to check that there was nothing wrong.

It's not the most attractive, Chair—

Well, it's a first for the Petitions Committee, I can tell you that. Just to get your view, then, because there seem to be conflicting views, one from the Scottish Power point of view, where they will continue to use debt collection agencies, and British Gas saying they will no longer use debt collection agencies. You represent a number of energy firms as Energy UK. Do you have a particular position on this, and if so, what is that?

I think that's an individual company business decision to be made. To some of the earlier questions around when it is or isn't appropriate to install a prepayment meter under warrant, and the example given, it's really important to recognise that the code of practice is about making sure that there is a uniform approach across the industry. On the example around someone under 85 with Alzheimer's, I think there's a high likelihood that that person would be forgetful, for example, and might not have a carer who could reasonably or practically top up the prepay. Because there should be a welfare officer on site with the warrant officer, that sort of situation ought to result in not fitting a prepayment meter, and I think that's the point. It's about the merit-based approach to when it's safe and reasonably practical to install a prepayment meter.

I think that it's also really important to recognise that these categories that are set out in the code of practice are not exhaustive, and it is about taking a tailored approach to supporting customers, particularly those in vulnerable circumstances, and understanding what's going on in a household. The reality is that energy companies just simply cannot respond if they don't know what's happening in a household and they don't know the circumstances of the people who live in it. 

Thank you. I'll ask Mr Ward and Mr O'Shea a further question to that before taking questions from Joel James around data. I had evidence submitted to me through a survey of a constituent of mine—we referred to this in the last session—and I'll quote their evidence to this. A family member relies on a medical device that has to be connected to mains electric when in use. They had an installation forced upon them last year. Under the new voluntary code of practice—and we heard from Mr Kenward from Ofgem in the last session that this will become guaranteed in the next winter—can you guarantee me and the committee that that individual would be now protected in the coming winter? I would look to Mr O'Shea—. I'm not picking on you, Mr O'Shea; you're nearest to me on the screen, if that makes sense. 

The rules on vulnerability apply to the bill payer, rather than the household. We have always in British Gas applied the vulnerability rules to the household. In that situation, we would not have installed a prepayment meter had we known, and we would not going forward. As Mr Ward says, sometimes you just cannot get people to talk. We only know what we know, which is why data sharing is so important. But had we known, it would not have been in compliance with our rules to have installed a prepayment meter, and we would not do that going forward. The code of practice does not change that for us in Centrica. We've been doing that for years. 

Thank you. Mr Ward. 

I think any energy company would probably welcome that detail of the example that you're actually highlighting today, to actually just look into that a lot more. Fundamentally, Scottish Power has always had a similar approach to what Mr O'Shea is saying. If somebody is dependent on an electricity supply to their home—and, again, it's the home—then we would not be forcing a prepayment meter into that home, because clearly it's just not safe for that individual, and we would always adopt that. If something has happened, and it was later brought to our attention, we would immediately rectify that. 

Thank you. Joel James.  

Thank you, Chair. I think Chris mentioned just now the importance of data sharing. I know we've heard from previous evidence sessions about the difficulty in getting access to that data, and then also in terms of how—. I don't want to say how open or transparent it is, but I just wanted to get to your idea in terms of what sort of data you are currently sharing with Ofgem, the UK Government, and then also the Welsh Government. I know, from speaking with Ofgem, they've basically said that they wouldn't necessarily be sharing that data themselves. I just wanted to get some ideas from yourselves, if that's possible. 

We share a lot of data—comprehensive levels of data—with Ofgem under our licence conditions. We are required to do that and we share a huge amount of information. We've got information on many of our customers and what we do with prepayment meters, they get information on financial position. We have a team that exists simply to deal with Ofgem data requests, and so there's an awful lot of data sharing there. We're very happy to share data, for example, with the Welsh Government, as and when required. We've obviously got to be cognisant of the general data protection regulation, but we're very happy to share that.

In my view, the optimal situation would be if we had a national register of vulnerable people that could be accessed by energy companies, by water companies, by financial services companies, and it would allow us not to have to—. In your previous example—somebody having a medical machine that they require electricity for—if we're not told about that and we don't see it, we don't know about it. If there's a central register for vulnerable people then we would know about that. That, for me, would be the data sharing. We share a lot of data, but the thing, I think, is that the data we need to establish a vulnerability exists in government and they're the best people to judge. Some kind of national register for me would be the ideal situation. It would mean that there was one single version of the truth, no matter which company, no matter which industry. 

Does anyone else want to come in on that? 

Mr Ward, I could see that you were nodding in agreement.

I absolutely agree. I think it would solve so many issues that we have today. I'll give you another example, Chair. If you look at what we do now to try and decarbonise homes in the UK, which is a process that is designed to reduce the ongoing cost of energy bills for a lot of homes in the UK, for a lot of households that clearly can't afford to pay for their energy right now, we have to go out and look for these homes, rather than use a national database that would actually help us target these properties. It would help in so many ways if we had this national database, as Mr O'Shea suggests. 

Dhara, you're still pink or purple on our screens in front of us, and I sense you may have missed some of that. But what you did hear, you agree with. 

Sorry, Chair. Yes, I do. I think there's quite a long conversation we could be having about what's currently known as the priority services register in the energy and water industries. It's more important now than ever that we do think about how to use technology to better understand people and the circumstances in their homes. The retail energy industry has potentially got huge scope to help people, as Andrew says, not only improve the energy efficiency of their homes, but also thinking about how to decarbonise heat, and just making those sorts of net-zero changes that we need to make to homes across the country. I don't need to tell this committee about the fuel poverty statistics that relate to Wales specifically, but you've got a high proportion of homes in fuel poverty and a high proportion of homes that could really benefit from improving energy efficiency. So, I think it's so important we better understand our customers, not only in relation to helping people to pay, but also in helping us innovate and get to net zero.

Thank you for that. Luke Fletcher wanted to come in.

Diolch, Gadeirydd. We just mentioned there the priority services register. I just want to get an understanding of why that wouldn't then be fit for purpose. We talked about the national register. Well, of course, if you get onto that priority services register, you register whether you're disabled or have additional needs, so why couldn't it be a case of just looking at that register in order to get the data around vulnerable households?

Obviously, not everyone's comfortable in sharing all of their data. The priority services register would, for example, put somebody on that register that had children under five years old, irrespective of household income. I think you would agree there will be households with children under five who are absolutely in poverty, and there'll be households with children under five who are absolutely not in poverty. So, the level of information we get from the priority services register at the moment is not sufficient to allow us to judge whether there's a vulnerability or not. I would say that if people were to look to go and register on there, I'm not sure they would all be very comfortable in sharing their vulnerabilities. That's why I think it's really something that's—.

What I suggested as the optimal solution is not without complication, because people with severe mental health issues, for example, may not want that to be noted on some kind of open register. So, the rules around accessing that data would probably have to be quite strict, but I think it's something that has to come from the existing knowledge base, because, again, people that are vulnerable or may have severe mental health issues may not want to register, may not think about registering or may not be capable of registering. However, the health service and the Department for Work and Pensions would know, and that's why I think it's got to be something that comes from government, but is governed by very strict privacy requirements.

Thank you for that. It seems, in this session, and, of course, outside this session, there has been lots of reflection, and perhaps what we've heard today, if I can summarise at this point, is if we would have known some of the problems in front of us, we wouldn't have installed prepayment meters. Would it not have been a sensible way of working to say, 'We don't fit until we are absolutely sure there is no-one vulnerable there'? 

One of the issues is, and Mr Ward mentioned it, customers not responding to requests or contact. If you think about it, the installation of prepayment meters under warrant sometimes involves forced entry to a property. We also would have made at least one welfare visit to each home before the installation of a prepayment meter. Sometimes people are not in, sometimes they are and they won't answer the door. So, I would love that to be the situation, but I don't think it's practical. Again, it goes back to this thing about people—. And I would differentiate between those who can't pay and those who won't pay. We've got to have something that protects those who can't pay, but doesn't allow those who won't pay to get a free ride, because that cost is picked up by absolutely everybody. I'd love it if we were able to say that, but I think with the average level of debt over £1,200 per customer before we put in a prepayment meter under warrant, then that debt would simply increase substantially. 

In one of the cases The Times reported where we didn't install a prepayment meter, that customer continues to accrue debt at £200 a month. I can't think of a way that we can recover that. That will be met by the general population. I don’t know whether that customer is able to pay or not able to pay. I’d like to be able to judge that. So there really is something around how can we fix this system so that it protects the vulnerable in society but it also means that others aren’t able to avoid payment and therefore just spread the cost around across those people who do pay their bills. The vast majority of people want to pay their bills. They try hard to pay their bills. But they are picking up the cost at the moment for people that don’t.

Thank you. Any further questions, Joel? I’ll move to Buffy Williams, who’s online as well. 

Thank you, Chair, and thank you all for joining us this afternoon. The water industry is not allowed to disconnect people. Could the same idea work for the energy companies?

I’m happy to take that. I’m not an expert on the water industry, but there are a couple of things that I would suggest. One is that the Consumer Council for Water, I think, noted that, since the ban on disconnection, the level of annual debt has more than doubled, and that debt is spread across all consumers. So, anything’s possible, but I think that the idea that you are not allowed to disconnect nor allowed to install a prepayment meter would lead to a material increase in bad debts, which would lead to a surcharge on every consumer’s electricity and gas bill. I worry a lot about those people who are, to coin a phrase, just about managing; those who are able to pay their bills, but they’re really, really struggling. And anything that sees their bills go up is something that would be trouble me.

I think the second thing I would say is—and I think some in the water industry might not agree with this—the water industry by and large has large capital investments, and then it provides the service, because the water comes from rain. In the energy companies, we have to actively go and buy that energy in the market. And so the difference you’d have is if you couldn’t disconnect, you’d have a customer for whom you were buying on a daily basis gas and electricity, and so you were actually putting money out and you knew that this customer wasn’t paying you. It would be akin to working in a supermarket and holding the door open every day for somebody who comes in and takes a trolley full of goods and doesn’t pay. So, I’m not sure it’s workable, because of the impact on those people who are struggling now but who are actually paying their debts. I think something that identifies those vulnerable people, and then we have more than an industry solution, it’s a societal solution for those people—I think that’s the best route to go down.

If I can bring in Dhara Vyas in, please.

Thank you, Chair. I think it’s exactly what Chris said, but also, the average annual bill in water is just over £430, I think. In energy right now, for electricity and gas, the average price cap is at £3,200, so there’s a big difference as well in the amounts of money we’re talking about.

Thank you. Mr Ward, do you have any comments on that, before we go back to Buffy?

I think what Mr O’Shea and Dhara say is fundamentally the right course of action. The reason why we’ve called for a social tariff is to recognise that people still want to pay for their energy, but you’ve got to make it slightly more affordable. That discounted ability through a social tariff, again supported by a mechanism to identify these households, is more of an enduring solution. I’m not saying it’s perfect, but it’s more of an enduring solution, which then takes away this sheer desperation that people are currently feeling now in certain households.

What do you think would be the consequence of banning prepayment meters?

I think Mr O’Shea has given a view. I think we have a real problem still in the UK about people who can pay for their energy but who decide they won’t pay. And if society was such that people were completely honest and we wouldn’t need to have this debate, then we probably wouldn’t be in this situation. But it is a real problem. Every day, we have thousands of people who just decide they would prefer to go on holiday rather pay for their energy, or prioritise something else. So, it’s a problem we have; it’s a real problem we have, because without the ability to install a prepayment meter, then debt will just significantly increase, and I do mean significantly increase. If we watch what happened through the early days of COVID, when we were unable to, obviously, enter anybody's property, we at Scottish Power saw the debt significantly increase over a three-month period just because people knew there was no implication for non-payment.

So, would you agree—I'll bring Mr O'Shea in now, but would you not agree that a societal problem is one person every single 10 seconds being disconnected from an energy supply at the moment?

Yes. I think—. Chair, you're not going to hear me sit here and say that anybody finds that acceptable, because, in this day and age, we shouldn't have an issue with people being unable to afford their energy. But the reality is that, up until now, we've not had any mechanism at all to recognise what is a societal problem, that people can't afford to pay for their energy—certain people in the UK.

I think the new code is a really positive step, because, actually, what I'm hoping it'll do is I hope it'll encourage some customers to actually come forward and engage, knowing that the prepayment meter isn't the inevitable answer, by speaking to their energy company. And we, as energy companies, now know there's a mechanism. The reality otherwise is that this energy still needs to be paid for. As Mr O'Shea said, we're still buying the energy and we still need to get that energy recovered. There is no mechanism in the UK just now for suppliers to recover that cost. So, let's be clear that this is still something that Ofgem still needs to work through with energy companies—the mechanism. But we are volunteering to take that step now. We're volunteering and trusting the mechanism, that that cost recovery process will occur. As Ofgem said, there's no legal right to do it right now in terms of taking this huge step, but, as energy companies, we recognise there's a problem—we want to move forward.

Mr O'Shea, I see that you have your hand raised.

Yes. Sorry, just on the question of prepayment meters, I just felt it was really important for us to differentiate between the hundreds of thousands of people who use prepayment meters voluntarily as a way to manage their budget and those people who have prepayment meters installed involuntarily under warrant. So, there is a huge amount of people—I think there are over 4 million households in the UK—that use prepayment meters. There was a recent White Paper issued by Utilita Energy, a supplier, predominantly on prepayment meters, that said, I think, that 86 per cent of people wouldn't want to change them; they find it very useful to be able to pay now. There had been until recently—or actually still, at the moment, there is—a premium for prepayment meter gas and electricity. We, in Centrica British Gas, eliminated that ourselves voluntarily. We equalised the prices for prepayment meters with other customers on 1 April, and I believe that Ofgem plans to do that on 1 July. That's an investment in the region of £50 million. Because we do recognise that there's an issue. So, the cheapest way to buy energy just now from British Gas is with a prepayment meter. So, I don't think the question should be around, 'Would you ban prepayment meters?', because that would take away a lot of choice that millions of people have already made to manage their energy in that way.

Dhara, we seem to have you without a pink filter on now. Would you—?Your assessment on, firstly, perhaps legislation to ban prepayment meters and any consequences that may have.

Yes. The fear, in going last with these things, is that you repeat what others have said, but I do think it's important to acknowledge, to really understand, that, I think, the average debt owed to the energy companies now is at £2.5 billion, which is the highest it's been in many years, and there is a real role for prepayment meters. There's a complex trade-off to be made and I think, whatever the next steps are for the committee, there is something very interesting as well in the space around what smart prepay can do, in terms of not only transforming the experience for customers, but also for the energy supplier. 

We at Energy UK run something called the vulnerability commitment, and, as part of that, there is an assessment made of suppliers in terms of how they're using the smart prepay capacity to understand how frequently people are doing things like self-disconnecting, which is not topping up—to your point around people being off supply—and also using that to understand people's topping-up patterns, but also, when people are self-disconnecting, trying to understand if there's an issue, that sort of thing. I think it's really important to understand how and why and when people do top up their energy and what they're using it for, because that's the only way you can then offer help and support. 

Other things, as part of the vulnerability commitment, include tens of millions of pounds of working with charities and consumer groups and debt-support charities. And that's all above and beyond the other policies and commitments that the energy suppliers already pay into. It's not exhaustive—there's always more we can do. And there's more we can do and better we can do. It's really important to frame this within the context of the last 18 months, where we've had 30 energy companies go out of business and bills tripling in the last 18 months. It's been a really, really hard 18 months, a hard period of time, and the cost-of-living crisis isn't over. This winter looks set to be really tough for a lot of people and the Government support is going to be falling away as well—the £400 and the energy price guarantee. So, energy suppliers are well aware that they need to continue upping the support and talking to customers to really understand what's going on in homes and offering the support they need to.

Thank you. Thank you, Chair.

Thank you, Buffy. To come back to your points on the vulnerability commitment, I'm conscious you might not have that in front of you now, but I'd be really interested in what Energy UK describe as 'vulnerability'. Because a lot of the problems we've seen, and the evidence we've heard, are because of the definition of 'vulnerability' through Ofgem. I'm conscious you might not have that now, but if you could perhaps send that to committee following this, it would be interesting, certainly for our eyes to see. Luke Fletcher.

Diolch, Gadeirydd. I am grateful for you guys' time today. I suppose I'm trying to work out whether or not you feel that you could actually say that you're confident that a situation like this wouldn't arise in the future. Because I've listened carefully to a lot of the answers that have been given today and I feel that the underlying sort of theme to all of them is, 'Well, this isn't our fault; it's the regulators', for example, for not having tougher regulations. We're simply operating in a system that is the product of the society we live in.' Could you feasibly say that if there's no action taken that you could be confident that this wouldn't happen again? I mean, there is surely a role for energy companies to look at the situation, a societal role for energy companies to look at the situation and say, 'Look, what's happening right now isn't right. We have a duty to do something about it as well', rather than just point at the regulators or point at Government for not taking action.

Firstly, if the impression that I've given is that this is not our fault, this is the problem of poor regulation or of Government, that's really not the feeling that I have; it's not the impression I'd give. I take full responsibility for everything that came out in The Times report. I was incredibly disappointed. The way some of our customers were treated was without respect. Now, that didn't mean that they were vulnerable customers that shouldn't have had prepayment meters installed. But they weren't treated respectfully. And so what I can say is we've taken the decision to bring the whole debt collection process in house, and that's because what I've learned over the past few months is that this is such a sensitive area that I don't feel comfortable not having direct control over it. So, with any organisation the size of ours—we have 7.5 million customers, we have 20,000 colleagues—I am confident that the vast majority of our customers want to pay their bills, I'm confident that the vast majority of my colleagues want to treat our customers with respect, and I feel more confident now about the debt journey work, bringing it back in house. Nobody can ever give a cast-iron guarantee that something won't happen again, that there won't be isolated incidents; what I can do is I can give you a guarantee, as I've done here, that, in the cases where we find that we have done wrong, we fix it and we make it right. We apologise, we reverse the actions that were done wrong, and we compensate our customers. I think that will always happen. I'd love to say to you that it will never happen again, that we'll never make another mistake, but I don't think that that would be fully honest.

In terms of the point about it being our place in society, it is absolutely our place to try and drive this debate. The point I was making earlier on is no one energy company can fix this, and the problem goes beyond energy. The people who are struggling to pay their energy bills are struggling to feed themselves, are struggling to pay their rent, are struggling to pay their mortgages, if they've got them. That's why I think that if we just focus and say, 'How do you fix energy?', we're missing the point slightly, because those people are using foodbanks, those people are facing eviction notices from local authorities because they can't pay the rent, and so there's a need for a far bigger debate, which is, 'How do we understand those who are vulnerable, who they are? How do we want to help them?' I support the call for a social tariff. And Scottish Power have been calling for this longer than we have at Centrica, but I wholeheartedly support that. I think it should be funded from general taxation rather than a levy on energy bills, because that's more progressive, and those that have the broadest shoulders will bear the biggest weight. And that will then allow people to pay their bills, because the majority of people do want to pay their way; some of them just can't afford it just now. 

Does anyone else want to come in on that point?

Yes, I think from a point of view of guaranteeing, you're not going to get me here saying I can absolutely categorically guarantee that a mistake won't happen. What I can say, and what I will say, is that we are working extremely hard to avoid a mistake happening. So, every single prepayment installation we've done over the last year, we are going back and thoroughly reviewing every single one of them to understand if it was carried out correctly. And we've not finished that exercise just yet; we're almost there. If there is anything at all that we think we've not done correctly, we'll go back, rectify, and we will compensate that customer accordingly, absolutely.

In terms of what we're doing to prepare ourselves under the new code of practice, as I said, a lot of those process steps we were already doing. But there are definitely some enhancements that I think are really positive for customers right now. And so we're making sure that our organisation—everybody across our entire chain—are actually trained and skilled and aware of the new code of practice. And again, it will be a case of, 'If in doubt, the meter doesn't go in.' It's as simple as that. But we're doing everything we can to make sure, before we restart, everybody's trained, everybody's briefed, and that we have the controls in place to try and avoid a mistake happening. 

Thank you. Sorry, Luke. 

I'm not sure if someone else wanted to come in before I moved on. 

No, fine. I was just seeing if Dhara wanted to comment on that. Perhaps, Dhara, do you have further comments before Luke's next question?

Yes, I'll keep it short. I think energy is an essential service, and the unprecedented cost of gas due to a global crisis has really pushed up customers and increased the pressure on energy suppliers. I think that it's always important to remember it is an essential service, and we do need a sustainable retail market to provide the service at the lowest cost. The energy industry has been, amongst the regulated utilities, one of the forefront leaders when it comes to how to best support and engage with people in vulnerable circumstances. And there's been an awful lot of work done over the last decade or so, certainly, that I've been involved, on how to do that and how to do that better. That doesn't mean that we've cracked it completely, and I think there are always going to be things that we can learn and continue to do better. 

I just think it's worth noting that we have done a lot, and I'm really, really happy, Chair, to your request, to send you the vulnerability commitment, but also maybe send you a little bit more on what we've been doing and what we're looking to do in the future. 

If you could do that, that would be very handy for us. Luke Fletcher. 

Diolch, Gadeirydd. I think we're all in agreement here that people are really struggling at the moment, and it's good to hear that energy firms are wanting to do everything they can to make it easier for people. But I think it's fair to say, Chair, that the perception around energy—not just energy companies, to be fair, but I think the energy sector—is pretty bad at the moment in the public sphere. Constituents are contacting all of us on this committee on a regular basis with some of the issues that they've had around energy bills this winter, and the worries they have going forward. 

I'm wondering, when you say you're looking to do everything that you can, does that include, then, looking at, say, for example, the profits that have been made by some of those companies? So, for example, Centrica, operating profits of £3.3 billion; Scottish Power, £1.6 billion. Admittedly, of course, when you do delve into those figures, the delivery side of the business is operating at a loss, but, overall, there's a significant profit to these companies. So, are we looking to use some of that profit to help some customers going forward? There was a figure mentioned earlier—I can't remember who said it now, but it was a fund of about £50 million. That's a drop in the ocean when you're talking about an overall profit of, say, £3.3 billion in Centrica's case. 

So, it was me that mentioned the £50 million. So, the £3.3 billion we made last year was pre tax. That includes £500 million for a business that, for accounting reasons, we reported as our results, but we'd sold it and those profits went to the buyer in Norway. So, it was £3.3 billion; about £1 billion of tax. It's still a huge amount of money. We've put £50 million aside, and we've committed to putting 10 per cent of the profits of British Gas Energy into a fund to support customers, over and above any of the requirements we have under our licence conditions. That is, by a distance, the biggest support package ever put in by an energy company. But you're right, it's not a significant amount in terms of the size of the problem that we're facing. That's why I'm quite vocal about saying we need to have a solution from society. Now, I've been asked the question, ‘Why don't we invest all of the profits that we make in Centrica into the retail market and reduce prices for consumers?' It actually wouldn't make a material difference to consumers if I had invested all of the profits. But what it would have done is, it would have resulted in complaints under competition law from competitors who don't have these other businesses. So, there are rules against cross-subsidisation.

But if you take the amount of profit that we make, take off the tax that we pay, and then you divide it by the fact that we have 7.5 million residential customers, you'll find that it wouldn't take off the majority of their energy bills. So, we could actually make Centrica zero-profit. It would no longer be a sustainable company, the employment for 20,000 people would be put at risk, and it wouldn't really solve the problem. So, I think we've really got to face into this issue, and it requires Government involvement. It can't be fixed by any one company. Now, Scottish Power have been battling—[Inaudible.] They're also like Centrica; they make profits elsewhere, and Andrew can speak for Scottish Power. But if he was to invest all of his profits in taking prices down for customers, I'm sure that they would have the same complaints that we would have from other people about unfair subsidy. So, it's a little bit more nuanced than that.

Absolutely. Just to come in, you look at where we are as a retail energy company—Dhara touched on it—31 companies failed. We've lost, over the last four years, as a retail company, £843 million. I have no money to give, yet we still provide a hardship fund. Since its conception, it's over £50 million that it's provided to customers in need. We don't have the energy model today to support this, and that's why I completely agree with Chris—we need a bigger solution here. It's not about the fact that we, Scottish Power, invest £8 million every working day, because we need to do that, because part of solving the problem that we have in the UK today—in terms of the national infrastructure, decarbonising, moving the whole country to a different platform—is huge. It's significant, and we invest as part of that supply chain. That's not going to solve the problem, in terms of people's energy bills, directly, but it will for the long term. It will help contribute that to the long term.

Thank you, all. We have run out of time. I'm conscious that we've gone over our allotted time, as well, so I appreciate you staying for just a bit longer. I will bring this session to a close now. I'm very grateful for you being with us. I should say, I hope that we don't see a similar situation repeating itself in this coming winter. I certainly do not want to be back here with a similar session next year.

There will be a transcript of today's session that will be shared with you. Please do look over that for accuracy and make any corrections, if necessary. Dhara, we would very much appreciate that vulnerability commitment and the definition there. If there are further things to share from our witnesses today, please do not wait for us to get in touch, however we might be in touch with further questions during our inquiry. But for now, diolch yn fawr iawn. I'm very grateful. Cheers.

Thank you very much.

Thank you. Bye.

Thank you.

Okay, moving to item 4 on today's agenda, new petitions. Item 4.1, P-06-1324, 'BCUHB has failed the people of North Wales and should be disbanded into smaller units'.

'Betsi Cadwaladr University Health Board (BCUHB) (Bwrdd Iechyd Prifysgol Betsi Cadwaladr) is the LHB of NHS Wales for the north of Wales. It is the largest health organisation in Wales, providing primary, community, mental health, and acute hospital services for a population of around 694,000 people across the six principal areas of north Wales (Anglesey, Conwy, Denbighshire, Flintshire, Gwynedd and Wrexham) as well as parts of Mid Wales. It has been in and out of special measures since 2015'.

Submitted by Stefan Coghlan, with 1,017 signatures. If I can bring in Members to discuss this petition and any actions we may wish to take. I look to Rhys ab Owen.

Diolch yn fawr, Cadeirydd. It's not a surprising response from the Minister. We've heard her say several times in Plenary, when put to her by other Members, that she's not in favour of breaking up Betsi Cadwaladr. There are extensive discussions on Betsi Cadwaladr in Plenary and also scrutiny of the health board by the Public Accounts and Public Administration Committee. I believe that there is probably room for us to acknowledge the concern with regard to patient outcomes and to thank the petitioner and to close the petition.

Diolch yn fawr, Rhys. Are Members in agreement? Yes, they are. Item 4.2, P-06-1327, 'Leisure Centre amenities free for children'.

'The students members of Ysgol Mynydd Bychan's Senedd strongly believe that Leisure Centre amenities should be free for children in Wales. This would help us keep fit and lead healthy lives'.

This was submitted by Tomos Michael Rogers with 371 signatures. And I believe the school will be watching us, if not live, perhaps tomorrow during their school day, so we're very grateful to you for engaging with our process today and in the future. I'll bring in Members to speak to this particular petition, and I look to Buffy Williams in the Rhondda.

Thank you, Chair, and I'd like to thank the petitioners. This is a very interesting petition, and I think there's a piece of work that can be done around this petition. I think, as a committee, we could write to the Welsh Local Government Association and ask them for a best estimate, then, to cost this free provision. I think, as a committee, that's about all we can do, but I think it's very interesting and well done to the young people for putting this petition forward.

I can see all Members are fully in agreement. Luke Fletcher wants to come in.

Diolch, Cadeirydd. I think it's worth us trying, as well, to look at what the likely impact of such a policy would be. I mean, it would solve a number of issues, really, wouldn't it, when you think about health in young people, giving young people, as well, something to do. We hear, very often, that young people feel that there's not enough things going on in their community. Well, this, potentially, is a way of addressing that. So, I'd be really interested to learn about the exact impact, not just in one particular policy area, but in multiple policy areas, so health and well-being just one of them.

Thank you, Luke, and I can see Members in agreement with both suggestions there, so we will action those. And again, thank you to the school for engaging with our important process.

Item 4.3, P-06-1328, 'Ensure that all social care workers in Wales are paid the new Real Living Wage (£10.90) immediately'.

'The Welsh Government made a pledge to pay social care workers in Wales the REAL living wage which was £9.90. In September, the Real Living Wage set by the Real Living Wage Foundation (RLFW) increased to £10.90. Social care workers are trying to make ends meet in a cost-of-living crisis. They are seeing RLWF accredited workers getting at least £1 per hour more for far less skilled jobs. They will soon be leaving the sector!'

This was submitted by Glyn Williams with 328 signatures. And I'm pleased to say, in response to this petition, the Government is supportive of the idea and has invested to deliver the real living wage. The letter from the Deputy Minister states that the Welsh Government is providing

'an estimated £70m in 2023/24 to pay the Real Living Wage uplift of £10.90 an hour, with workers feeling the benefit by June 2023'.

I don't think there's much more we can do here to support the petition apart from congratulate the petitioners and thank them for engaging. Do Members agree? They do.

Item 4.4, P-06-1329, 'Set an ambition and a clear timetable to give every child in the country Welsh-medium education'.

'We believe the Welsh Government should include in upcoming legislation a statutory aim that every young person in Wales will be educated through the medium of Welsh, building up to this over time, to ensure more and more young people in the future become fluent and confident in the language'.

This was submitted by Luke Johns with 1,505 signatures, and I bring in Joel James to speak to this petition.

Thank you, Chair. I note from the report that there are a number of consultations and reports that are in the process of being published soon, for example, the Senedd committee inquiry into Welsh education strategic plans and everything, so it's probably best that we just wait to see the outcomes of those. And I know the Welsh Government is consulting on a White Paper as well about this, so yes.

Thank you, Joel. Do Members agree? They do.

Item 4.5, P-06-1330, 'We call on the Welsh Government to reject their proposals for a council tax revaluation'.

'Monmouthshire residents face astronomical council tax hikes if proposals to revalue homes go ahead. A revaluation of 1.5 million properties in Wales is being suggested in a Welsh Government consultation. Under 'A Fairer Council Tax’ new bands would be created and new tax rates for each band would be set. Included in the consultation are links to reports by the Institute for Fiscal Studies and University of Sheffield estimating the extra costs people will face in different parts of Wales'.

This was submitted by the Secretary of State for Wales, the Rt Hon David T.C. Davies MP, with 3,324 signatures. I bring in Members to discuss this petition and any actions they may wish to take. Rhys ab Owen.

Well, firstly I'd like to thank the petitioner, the Secretary of State, for his interest in a devolved area. We can see quite clearly the intention of the Minister in her letter and in the Plenary statement to us recently. We can also see from the co-operation agreement between Plaid Cymru and Welsh Government that this is a clear intention by both parties. There's already been preliminary scrutiny of this by the local government committee. There'll be a further opportunity for consultation, which has been mentioned by the Minister, and also an opportunity for scrutiny of the local government Bill. So, again, I'd like to thank the Secretary of State for his interest, and propose that we close the petition. 

Any further comments from Members? Joel James.

Thank you, Chair. What it is, I'm only conscious of my comments on the last petition, where I noted a number of reports and consultations happening. Obviously, with what my colleague has just mentioned then, something similar is happening now, so rather than closing it, would it not be worth while keeping it open until after, and then the Secretary of State has a full and comprehensive response?

Thank you for that, Joel. I think it's a fair suggestion, to keep it open on that basis. I don't think there's much more we can do, but we can keep it open and review when perhaps the consultations have finished. But again, we'd like to thank the Secretary of State for Wales for his interest and the endorsement of how important the Senedd Petitions Committee is to the people of Wales. We very much welcome that.

Item 4.6, P-06-1332, 'Fund vaccine research to protect red squirrels from deadly Squirrelpox virus'.

'Squirrelpox virus is carried and spread by grey squirrels. It doesn't harm them. When red squirrels are infected they develop open extensive skin lesions and die a painful death within two weeks. In north Wales, 70 to 80 per cent of the Gwynedd red population was lost in the 2020-21 outbreak'.

There is a link to that outbreak. It then goes on to say that,

'Promising research from the Moredun Institute into a vaccine ran out of funds'.

This was submitted by Dr Craig Shuttleworth, who has been a good petitioner of this process, and a keen person to engage with, and it collected 11,076 signatures.  I invite Members to discuss this petition and any actions they may wish to take. Buffy Williams.

Thank you, Chair. I'd like to thank the petitioner. I know we've already had one very lively debate on the Chamber floor on the issue of the red squirrel and its habitat. I wonder if, now that this petition has also reached the threshold for a debate, we should be thinking of debating this petition on the Chamber floor, and its importance. 

Thank you, Buffy. I can see Members nodding in agreement. We will seek time from Business Committee for such a debate, and see how Business Committee respond.

Item 5 on the agenda, updates to previous petitions, 5.1, P-05-1106, 'Introduce personal health budgets and personalised care in Wales', submitted by Rhys Bowler with 779 signatures. I bring Members in to discuss any actions they may wish to take here. Joel James. 

Thank you, Chair. I note from the report that the Welsh Government has recognised this as an issue, and is in the process of trying to address it. I know that the Deputy Minister has offered to provide ongoing further information, so, I suspect it might be best, if the rest of the committee are minded, that we keep this open just to see what further updates the Deputy Minister can provide us.

Diolch, Joel. I see that Members agree. Item 5.2, P-06-1213, 'Ban leisure use of Seadoo/jet ski in Cymru. Except in strictly controlled designated areas'. This was submitted by Richard Jenkins with 1,432 signatures. I bring Rhys ab Owen in to discuss any actions we may wish to take.

Diolch yn fawr, Cadeirydd. I can see from the response that the Minister is not considering legislating in this area and prefers to raise awareness and influence behaviours, and gives examples of that. The petitioner has seen the response and has thanked the Chair and the committee for raising this issue, which shows the importance of this committee. However, at this stage, I don't think there's anything more the committee can do other than to thank the petitioner and close the petition.

Diolch yn fawr, Rhys. Do Members agree? Yes. Item 5.3, P-06-1247, 'We call on the Welsh Government to lead the way by supporting trials of a four-day week in Wales', submitted by petitioner Mark Hooper with 1,619 signatures.

I should note that, on Wednesday last week, we had a lively debate in the Chamber once again from all sides of the argument in the Senedd, debating our report into the inquiry undertaken by this committee. The Minister, in response to our debate, noted the work of the workforce partnership council, and they will be reporting back on their work in November. And given the suggestions on previous petitions where we keep them open and see what that work is, perhaps we can do the same with this report. I bring Gareth Price in. 

Just to note that she also said in the debate that she would publish the terms of reference for that piece of work before the end of the summer, so if we get that, we'll add that to the petition at that point.

Excellent. So, we should definitely note that positive response from the Minister, and we'll bring  that forward—. It's a positive for some, that's all; Joel James is perhaps in disagreement here.

Item 5.4, P-06-1294, 'Don't leave metastatic breast cancer patients in Wales behind'. We did refer to this in the previous outcome, I brought this petition forward on today's agenda. It was probably about an hour or so ago, if people wanted to go back and review the actions taken by the committee there.

Item 5.5, P-06-1303, 'Create, fund and sustain sufficient affordable nursery and childcare places for all working parents', submitted by Gill Byrne, with 260 total signatures collected, 96 of them online and 164 of them on paper. I will bring Rhys ab Owen in to discuss any actions we may wish to take.

Diolch yn fawr, Cadeirydd. I propose that we wait for the publication of the independent review that assesses the 2022 childcare sufficiency assessments. That report is due this spring, so it should be with us very shortly, unless their definition of 'spring' is different from others'. So, I propose that we wait until that report.

Are Members in agreement? Yes, thank you. Item 5.6, P-06-1325, 'Lower the speed limit on the A5 through Glasfryn', submitted by Gwennol Ellis with 271 signatures, and I bring Buffy Williams in to speak to this petition.

Thank you, Chair. I'd like to thank the petitioner for bringing this petition forward, and I note that the Deputy Minister has already made a commitment to prioritise conducting a review of the speed limit through Glasfryn once the new guidance has been published. I'm not quite sure what more, as a committee, we can do with this petition. I also note the petitioner's continued frustration with the situation, but as a committee, I'm not quite sure where we can go with this now. So, I think the best course of action we can take is thank the petitioner and close this petition.

If Members are in agreement, yes, okay.

Moving on to item 6 on today's agenda, we have a number of papers to note. We have a letter from the Chair of the Children Young People, and Education Committee accepting our recommendation to the committee’s report and also informing us that their committee report on care-experienced parents will be out in May.289

There’s a letter from the Chair of the Local Government and Housing Committee, informing us that, as part of their agreed terms of reference for their inquiry into the private rented sector, they will include a specific reference to pets.290

There’s also a letter from Wales Wildfire Board, expressing support for controlled burning in Wales, and then there’s a letter from Citizens Advice Cymru to the Minister for Social Justice, which the committee was copied in to, and that was a letter in response to the scrutiny sessions that we've held today and the petition in front of us about the prepayment meter scandal in Wales. Are Members content to note those papers? Yes, good.

Item 7, then, today. That does conclude today’s public business. Can I propose, therefore, in accordance with Standing Order 17.42(ix) that the committee resolves to meet in private for the remainder of the meeting? Are Members content? They are. Very good. Thank you. We will meet again on 5 June. Until then, diolch yn fawr.