Social Justice

41,000 vulnerable households had their energy debt written off in Catalonia. Is the UK government listening?

Fuel poverty campaigners have called on the UK government to follow Catalonia's example after it wrote off 41,000 people's energy debt

energy debt spain

Girona in northern Catalonia, Spain. Image: Unsplash

In case you needed another reason to move to Spain, more than 41,000 vulnerable households in sunny Catalonia have just had their energy debt written off. That is €18 million (£16m) worth of outstanding payments taken off the shoulders of families forced to choose between bills, food and rent.

Meanwhile in the UK, millions of people are behind on their bills after energy prices more than doubled in a year. Hundreds of thousands have had prepayment meters forcibly installed in their homes and every 10 seconds, someone is cut off from power and left in a cold and dark home because they can’t top up their meter. Energy bills will be going up even further in April.

“Catalonia is definitely showing the way forward,” says Ruth London, of Fuel Poverty Action. “Most customers’ energy debts are the result of unjust pricing and energy policies which have impacted millions of people worldwide through no fault of their own. They should be written off and the policies which produced them should be urgently changed.”

Catalonia, an autonomous region in north-east Spain whose capital is Barcelona, has supported people living in fuel poverty for years. In 2015, its parliament banned electricity disconnections for vulnerable households. Then in 2021, it made a deal with energy company Endesa to support families living in energy poverty. 

Around 35,000 households were freed of their energy debts that year, and 41,000 more will benefit this year.  Local authorities pay the company half of what is owed, and the rest is written off, with the slate wiped clean for vulnerable families. 

“It is a scandal that in the UK, one of the richest countries in the world, thousands die every winter due to fuel poverty and cold homes,” London adds. “UK governments have lagged far behind Europe in ensuring good housing standards and efficient, green affordable heating systems.

“The forced imposition of prepayment meters – now due to start again from the end of March – is a final twist of the knife for people who cannot top up and lose access to gas and electricity.”

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Around 3.4 million UK gas and electricity accounts were in debt in the first quarter of 2022, according to the latest Ofgem data. That is before the price cap was hiked in April and again in October – more than doubling energy bills in the space of a year. 

Courts granted hundreds of thousands of warrants to energy companies to enter customers’ homes and forcibly install prepayment meters, in a national scandal as reported by The Big Issue

Ofgem has temporarily suspended the practice and has called on energy suppliers to offer compensation to customers if a meter has been installed incorrectly. But companies will be allowed to start forcibly installing prepayment meters again from the end of March. 

Citizens Advice has found that 3.2 million people across the UK ran out of credit on their prepayment meter last year because they didn’t have enough money. That is one household left without power every 10 seconds. 

The government has promised more cost of living payments for the most vulnerable, given people £400 discounts on their energy bills over the winter and introduced an energy price guarantee of £2,500. 

But campaigners want the UK government to go further, to follow Catalonia’s example and write off vulnerable people’s debt – particularly those on prepayment meters. 

Joe Cox, senior policy officer at Debt Justice, says: “By not acting, the government is abandoning people to the deadly effects of cold and damp homes, and the anxiety of unpayable arrears. It is time for the government to pay down all debts held by prepayment meter customers, in full. 

“This intervention is eminently affordable as the falling cost of gas means the government’s energy support package will now cost them half of what they originally budgeted for.”

Simon Francis, the coordinator of the End Fuel Poverty Coalition, agrees. The coalition is calling on Ofgem to write off all debts for prepayment meter customers and introduce a “debt matching relief scheme” for all other people with a debt repayment plan. 

Under the scheme, every £1 paid back by the customer would be matched by £2 from a central debt relief fund. Francis estimates this would cost the government approximately £2bn – but it could be paid for with the underspend on the energy price guarantee and fines on energy firms. 

Fuel Poverty Action is going further and pressing for Energy For All. Each household would receive enough energy to cover basic needs like heating, lighting, hot water, and medical appliances. It would be paid for by higher tariffs on luxury or wasteful energy use, by windfall taxes and an end to the millions spent daily on subsidising fossil fuels.

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The Big Issue’s #BigFutures campaign is calling for investment in decent and affordable housing, ending the low wage economy, and millions of green jobs. The last 10 years of austerity and cuts to public services have failed to deliver better living standards for people in this country. Sign the open letter and demand a better future. 

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