Gordon Brown has urged the head of energy regulator Ofgem to quit over the scandal which has seen hundreds of thousands of vulnerable Britons forced to switch to costly prepayment meters.
In an extraordinarily outspoken attack, the former prime minister says Jonathan Brearley should “consider his position” – and accuses him of failing “dismally” to protect customers, some of whom have been pushed into the hands of loan sharks.
Mr Brown also targets Rishi Sunak and his ministers over the failings, arguing that the poorest are being driven into a “nefarious doom loop” of debt by “callous” government policies and forced to to offer sexual favours or sell drugs to ‘circling’ loan sharks.
Writing for The Independent, he says: “At this time of reshuffles, the Ofgem regulator should consider his position for failing on his responsibilities to energy customers subject to the forced installation of prepayment meters.
“His official responsibility could not be clearer… So he and, the now restructured Energy Department, should immediately explain why instead of being on the side of the public, they have failed dismally to properly monitor and expose utility companies and their debt agents who, in the middle of the worst cost of living crisis for fifty years, have been breaking into the homes of impoverished customers.”
Mr Brown, who works alongside local charities in his hometown in Fife, says there had been little protection for victims forced to offer sexual favours or sell drugs by ruthless loan sharks during the cost of living crisis.
“Blood is in the water and loan sharks are circling forcing people into a cocktail of debt,” he says. “A record number of families are now so deep in debt that they are turning to the door step lender, and the pay-day lender standing outside the cut-price stores, the pub and the betting shop.”
The government is facing calls for an inquiry into how energy companies used debt agents to force their way into the homes so prepayment meters can be installed for those struggling to pay their bills.
On Monday senior presiding judge of England and Wales told magistrates to stop applications to enter homes, after then business now energy secretary Grant Shapps and Ofgem asked energy suppliers to voluntarily suspend the activity.
The issue was thrust into the spotlight after reports that British Gas subcontractors were breaking into the homes of customers – including disabled and mentally ill people – to install the meters.
Mr Brown said action had not come quickly enough. The former PM said Mr Brearley, believed to earn over £300,000 a year, had failed in his responsibilities to protect customers during the worst cost of living crisis for 50 years.
“His stated role is to “protect energy customers by ensuring they are treated fairly”, an instruction that is especially relevant as oil and gas companies record windfall profits. If even that duty is not explicit enough, his obligation is set out in print even more pointedly: “stamping out sharp and bad practice”.”
Mr Brown added: “The official agencies guilty of this dereliction of duty should face up to the sheer scale of the damage being done to those least able to afford it.”
Citizens Advice has estimated that 600,000 people were switched from credit meters to – typically more expensive – prepayment meters last year. The charity said 3.2 million on prepay meters were left in the cold and dark after running out of cash.
“As local charities I work with are finding, users of prepayment metres have to spend a lot more for each unit of their energy and, even then at least 20 per cent have not been able to obtain or cash the discount vouchers they were promised,” said Mr Brown.
“Ofgem is not alone in failing to defend low-income families against the indefensible. Right across government and its agencies, harsh and callous policy decisions are turning illegal money lending into Britain’s biggest booming business among low-income communities.”
Mr Brown called for more action and tougher sentences for illegal money lenders – citing reports that some loan sharks have demanded “sexual favours” and the delivery of drugs from their victims.
He also repeated his called for the Department for Work and Pensions (DWP) to ease repayment conditions on loans and suspend benefit deductions – saying it was time for the DWP reset its role from being “the biggest debt collection agency in the country”.
Mr Shapps, named as the new energy secretary earlier on Tuesday, had given companies a deadline of the end of Tuesday to report back on what action they would be taking – including compensation – on prepayment meters wrongfully installed in their homes.
But No 10 said the government was not going to be “prescriptive” about the form of any compensation. Rishi Sunak’s spokesman said it was up to the energy firms to consider “whether compensation is appropriate and what scale and indeed what form it takes”.
Senior Tory MP Sir Robert Neill, chair of the justice select committee, said an inquiry was needed into how bulk court applications for forced entry into homes were made. He said it was a “serious matter which brings the court process into disrepute”.