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Poverty Premium

Why should energy cost more if you’re in social housing?

The following blog was written by Fair by Design’s Director, Lucie Russell  for the APPG on Poverty.  It highlights how residents on a social housing estate in East London are paying over the odds for their energy through pay as you go prepayment meters.   Our thanks to Michelle Edwards LittleLaw  for bringing this to our attention.

The Poverty Premium can sometimes come over as an ethereal concept, so it’s the concrete examples that really bring it alive. These are the ones where it’s clear that the people impacted are being driven into yet more poverty because of it.  The way the Poverty Premium impacts on them is clearly an injustice. These concerns hit me squarely when reading the February 2019 column by Michelle Edwards in independent local newspaper, the Waltham Forest Echo. Edwards is a campaigning journalist and a Marlowe Road Estate resident in the London Borough of Waltham Forest. Her piece on the newly completed affordable housing block on the estate as part of its regeneration programme raises a particular concern for those residents in relation to their energy provision.

Energy costs for people in poverty are the biggest driver of the Premium, so when we saw her piece we thought it was really important to highlight it as a part of our involvement in the APPG on Poverty Inquiry into the Poverty Premium.

Edwards told me “All the new and existing tenants moved into the block as part of the regeneration development were given an eleven-page Residential Heat Supply Agreement for their heating and hot water.” The dictated terms in the Agreement for their method of payment is a pay-as-you-go prepayment meter. In her words, “Having a prepayment meter almost always means paying more than you need to for energy bills. Not only is the unit price for energy more expensive with a prepayment meter, but the cheapest tariffs offered by energy suppliers are usually not made available for prepayment customers. The council may at its own discretion vary the energy tariff rates for the supply of energy at any time. As it stands, the meter is the only option available to residents”.

According to the piece, payments for the prepayment meter are managed by a third party called EEMonitor. Of the residents she spoke with each had reported problems with their meter. “Apparently the top-ups disappear at an astonishing rate.” One tenant told her he moved in on 12th December 2018 to find his meter was already showing a reading of minus £5. Apparently, the construction workers had left the heating on. Up to 20 January, the tenant had put £60 on the meter.  As a disabled occupant he can only afford to turn his heating on for one hour a day. In another of her examples for a similar period, a household had spent £70. The children of that household were told to cut down their showers and only turn the heating on when absolutely necessary. A third resident she met required consoling in the foyer. His mother has a medical condition that affects her bones. In order to keep warm, she has to stand up against the radiator.

This is the stark reality of how people are being locked into extra charges for their energy. There are many more across the UK. There must be a better way to support poor and vulnerable communities to enable them to make ends meet rather than locking them into yet more hardship. We hope the APPG on Poverty Inquiry into the Poverty Premium report makes a real difference to those on the ground who, like the Marlowe Road residents, are struggling to keep their heads above water. It’s time for action.

Lucie Russell

Fair by Design is a movement dedicated to reshaping essential services, like energy, finance and insurance, so they don’t cost more if you’re poor.  People in poverty pay more for energy, finance and insurance than those on higher incomes.  This is the Poverty Premium.