Elderly ladies make easy pickings. Single parents, the new recruit was told, are also a mainstay of the trade. So harden your heart to their pleading, even if they do have tiny children, because: “If every single mum that starts getting a bit teary you’re going to walk away from, you won’t be earning any bonus.” Just get yourself inside the house and fit that prepayment meter, even though it will cut off their gas if they can’t afford to keep their credit topped up, leaving them to shiver in the dark.
The advice above, given to a Times reporter working undercover for a company employed by British Gas to deal with customers falling behind on their bills, is spine-chilling, and yet it should come as no surprise. Three weeks ago, this newspaper reported a warning from Citizens Advice about vulnerable people – for whom energy suppliers are supposed to make exceptions – being inappropriately forced on to expensive pay-as-you-go meters after falling behind with electricity or gas bills.
Among the cases advisers had dealt with were those of a single parent who has resorted to warming up milk for her baby at her GP’s surgery and a woman with a lung condition who can’t charge the breathing machine she needs at home when her power is cut off. British Gas may say that it seeks to impose prepayment meters only on customers who refuse to engage with it over unpaid bills, but debt is frightening, and running away from it – binning the scary brown envelopes unopened, pretending not to be in when someone calls, hoping it will all somehow go away – is a natural human response when you know that, with the best will in the world, you just can’t pay.
The problem has been spelled out over and over again – by charities, MPs and last year’s cross-party select committee inquiry into the energy market. Grant Shapps, the business and energy secretary, wrote only a few days ago to energy companies warning them to stop force-fitting the meters. If British Gas didn’t know exactly what its contractor, Arvato Financial Solutions, was doing on its behalf, then it should have, and it deserves to be wriggling very publicly on the hook. But the uncomfortable broader truth is that this is a problem bigger than any one utility provider.
One in five households are already struggling to pay their water bills. From April, those bills are expected to go up by an average of 7.5% – the biggest such rise for two decades. From the end of March, the government is due to start scaling back its help with fuel bills, exposing customers to more painful rises.
On Thursday, the Bank of England raised interest rates, which means not just costlier mortgages but higher rents if buy-to-let landlords pass on their pain. Petrol duty may also rise in the March budget, although Tory MPs are arguing hard for a reprieve, and food prices are still going up. Everything points, in short, to a horrific cliff-edge looming this spring, and an avalanche of debts, defaults, evictions and unpaid bills to follow.
Put simply, frighteningly large numbers of people just don’t have enough money to absorb the shocks that are coming. Wages are too low, benefits too mean, and the cost of living too high for them to afford even the basics, which is turning the providers of those basics into reluctant canaries in the coalmine.
When gas prices rocketed after Russia’s invasion of Ukraine, it was energy companies that lobbied loudly for the government to bail out ordinary households, deducing correctly that otherwise they would be swamped with unpaid bills. It’s not just charities now sounding the alarm about poverty, but Iceland’s CEO, Richard Walker, who aspires to become a Conservative MP, and warned last summer that his stores were losing customers to food banks or simply “to hunger”.
We are approaching the surreal point where it’s in corporate Britain’s self-interest to start banging the drum for a more redistributive tax and welfare system before it runs out of people to sell things to. Iceland made a loss last year, if you were wondering. But British Gas expects earnings to increase eightfold this year. Meanwhile, there is something obscene about the oil and gas producer Shell announcing yet more record profits – among the biggest in British corporate history – this week amid a fuel crisis that is driving families to the brink.
Since the bulk of those staggering profits were made (and taxed) overseas, a raid on Shell’s coffers wouldn’t be as straightforward as it might look. But the windfall tax Rishi Sunak was eventually shamed into slapping on oil and gas companies last year could almost certainly be working far harder than it is, judging both by the amount Shell paid out to its doubtless grateful shareholders and the relatively paltry amount it invested in renewable energy sources that will ultimately both save the planet and cut bills.
British Gas, for its part, has already agreed to plough part of its profits into helping customers with bills. But broader energy market reform is as woefully overdue as all the other big reforms that tend to fall through the cracks when a governing party has three prime ministers in as many months.
Shapps should be looking urgently at cheap, “social” tariffs for those who are never going to be able to pay their bills otherwise, including sick and disabled people with power-hungry medical equipment at home, plus an immediate end to the cruelty of charging customers on prepayment meters higher rates than everyone else. But when power, water, food, rent and transport are all going up, this isn’t a problem one cabinet minister can solve alone.
If there’s a glimmer of good news here, it is in the Bank’s suggestion in its forecast that this is the darkness before the dawn; that inflation is peaking, the coming recession won’t be as bad as it could have been, and by autumn things may look much brighter, if we can just hang on in there. If so, that’s all the more reason to catch people before they fall down a rabbit hole of debt whose consequences can last for years.
One missed payment is all it takes to set off a chain reaction of charges, fines, sleepless nights and hiding from creditors that ends in the bailiffs being called in. So of course ministers should crack down on unscrupulous debt collectors. But the real skill is in intervening long before they come knocking on an elderly woman’s door.
Gaby Hinsliff is a Guardian columnist
