Source · Select Committees · Energy Security and Net Zero Committee
5th Report - Tackling the energy cost crisis
Energy Security and Net Zero Committee
HC 736
Published 29 October 2025
Recommendations
2
Not Addressed
Establish an Energy Data Sharing Taskforce to improve support schemes and tackle fuel poverty.
Recommendation
The Government should immediately establish an Energy Data Sharing Taskforce involving energy suppliers, government departments, HMRC, local authorities, the National Health Service and relevant third parties. This should establish clear and effective mechanisms for data sharing with the specific ambition …
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Government Response Summary
The government's response acknowledges the importance of data sharing and describes ongoing work with various departments and an existing industry working group, but it does not commit to establishing the specific 'Energy Data Sharing Taskforce' as recommended.
Department for Energy Security and Net Zero
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9
Deferred
Launch consultation on energy social tariff by January 2026 for introduction by winter 2026–27.
Recommendation
We recommend that the Government launches a consultation on an energy social tariff by January 2026 and commits to introducing a social tariff on this basis ahead of winter 2026–27. (Recommendation, Paragraph 35)
Government Response Summary
The government states it is consulting on extending the Warm Home Discount and will consider all options for future bill support, and has sought views on the design of support for fuel-poor households as part of the Fuel Poverty Strategy review. However, it does not commit to launching a specific consultation on an energy social tariff by January 2026 or introducing one by winter 2026–27.
Department for Energy Security and Net Zero
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11
Acknowledged
Explore reforming Cold Weather Payment to provide daily payments during sub-zero forecasts.
Recommendation
The Government should explore reform of the Cold Weather Payment considering whether a £10 payment could be made to eligible households every day that the Met Office forecasts that the average temperature will be zero degrees or below the following …
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Government Response Summary
The government states it keeps policies under review but describes the current Cold Weather Payment system, justifying its existing structure of £25 for seven consecutive days of cold weather, without committing to explore the proposed daily payment reform.
Department for Energy Security and Net Zero
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24
Accepted in Part
Set ambitious smart meter targets, including interim rollout and reliability for existing operational devices.
Recommendation
The Government must set ambitious new targets for smart meters by the end of this year, including interim rollout targets to 2030 and strict new targets for suppliers on the reliability of existing smart meters and a requirement that smart …
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Government Response Summary
The government has opened a consultation on a new policy framework for 2026-2030, proposing that suppliers complete the smart meter rollout by 2030 and meet more stringent requirements to ensure meters are operational within 90 days. Responses to this consultation are currently being analysed, indicating a future commitment to new targets.
Department for Energy Security and Net Zero
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27
Accepted in Part
Place Energy Ombudsman on statutory footing, publish supplier compliance, and ban debt collection during investigations.
Recommendation
The Government must place the Energy Ombudsman on a statutory footing and data should be published on the compliance of each supplier with its rulings, including whether these are delivered on time. The Government must also ban energy suppliers from …
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Government Response Summary
The government is proposing to explicitly designate the Energy Ombudsman through legislation to strengthen its position and create a legal obligation for suppliers to implement rulings. However, it does not commit to publishing supplier compliance data or a direct ban on debt collection during investigations, noting that Ofgem already has rules for fair and proportionate debt recovery.
Department for Energy Security and Net Zero
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31
Deferred
Develop and introduce an opt-in energy bills discount scheme for businesses within six months.
Recommendation
We agree with Make UK that the Government should introduce an opt-in energy bills discount scheme for businesses, whereby the Government provides eligible businesses with a unit rate discount, up to a maximum value, when wholesale prices rise above a …
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Government Response Summary
The government acknowledges the challenge of high industrial electricity prices and details existing and planned support schemes. However, it defers committing to the recommended opt-in energy bills discount scheme, stating it will engage with Make UK on alternative approaches and issue a call for evidence on the CPPA market.
Department for Energy Security and Net Zero
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32
Not Addressed
Clarify funding for industrial competitiveness schemes and pre-2027 business support.
Recommendation
In its response to this Report, the Government should clarify how exactly it will fund the British Industrial Competitiveness Scheme and other support measures to reduce industrial energy costs in the Industrial Strategy. It must also clearly explain how it …
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Government Response Summary
The government's response outlines various support measures but fails to clarify how the British Industrial Competitiveness Scheme will be funded or how businesses will be supported prior to its introduction in 2027, as specifically requested by the committee.
Department for Energy Security and Net Zero
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34
Rejected
Introduce caps on business energy out-of-contract rates, deposits, and a 14-day cooling-off period.
Recommendation
We recommend that Ofgem introduce a cap on out-of-contract rates and deposits that can be charged by suppliers to agree or renew business energy contracts. It should also introduce a mandatory 14-day cooling off period following a business energy bill …
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Government Response Summary
The government supports Ofgem exploring options for caps on out-of-contract rates and deposits. However, it effectively rejects the mandatory 14-day cooling-off period, citing its complexity and potential for increased costs, suggesting dispute resolution as the appropriate alternative.
Department for Energy Security and Net Zero
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35
Not Addressed
Require energy suppliers to itemise and publish all non-commodity costs on business bills.
Recommendation
We recommend that Ofgem require energy suppliers to clearly itemise and publish online all non-commodity costs charged on business energy bills to ensure full transparency of all costs. (Recommendation, Paragraph 118) 49
Government Response Summary
The government's response discusses general protections in the non-domestic energy market and the regulation of brokers but does not specifically address the recommendation for Ofgem to require energy suppliers to itemise and publish all non-commodity costs online.
Department for Energy Security and Net Zero
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Conclusions (26)
1
Conclusion
Acknowledged
More effective data sharing between key stakeholders will be essential in making all government support schemes fairer, better targeted and cost effective. We welcome the Government’s plans to improve data sharing across Whitehall but believe it must move further and faster, recognising that more effective data sharing will be instrumental …
Government Response Summary
The government acknowledges the priority of improving data sharing and outlines ongoing work across departments, including a working group with industry, to enhance data accuracy and availability for better targeting support.
3
Conclusion
Acknowledged
The Warm Home Discount is a crucial mechanism to tackle fuel poverty and we welcome the Government’s plans to broaden eligibility for the scheme for winter 2025–26. However, it is deeply troubling that millions of households in fuel poverty and many living with disabilities or long-term health conditions are still …
Government Response Summary
The government highlights its recent expansion of the Warm Home Discount to include an additional 2.7 million households, bringing coverage to 45% of fuel-poor households. It notes the committee's recommendation for further extension and increased value, stating it will explore improvements and respond to a consultation in due course.
4
Conclusion
Deferred
The value of the Warm Home Discount has increased by only £10 since 2011, while household energy bills have risen by more than £500. The current value of the rebate is wholly insufficient to support vulnerable consumers this winter and compounds a severe affordability crisis in this country. Given our …
Government Response Summary
The government highlights that eligible households will receive £150 off their winter energy bills and acknowledges the committee's recommendation to increase the rebate's value. It states that it will explore improvements to the level of support and scheme reach during the next scheme period, following a consultation.
5
Conclusion
Accepted in Part
The eligibility criteria for the Warm Home Discount should be broadened to include all households in fuel poverty and those meeting vulnerability criteria, such as those with disabilities or long-term health conditions. (Recommendation, Paragraph 28)
Government Response Summary
The government states it expanded the Warm Home Discount to cover an additional 2.7 million households, reaching 45% of fuel-poor households. It notes the committee's recommendation for further expansion and commits to exploring options for improving the scheme's reach and providing additional support to fuel-poor and excluded low-income households, following a consultation response.
6
Conclusion
Deferred
From winter 2026–27, the Warm Home Discount should be retargeted using a tiered approach, so that funding is allocated based on household need and energy usage, and the value of the rebate should be linked to wholesale prices. (Recommendation, Paragraph 29)
Government Response Summary
The government states it will explore improvements to the Warm Home Discount scheme, including the level of support and reach, following a consultation. It notes the committee's recommendation to link the rebate value to wholesale prices and aim for a more targeted scheme, but does not commit to a specific tiered approach or pricing link for winter 2026–27.
7
Conclusion
Accepted
For all these reasons we believe that reducing energy costs for everyone should be made the top policy priority. (Conclusion, Paragraph 33)
Government Response Summary
The government explicitly states that reducing energy costs is a top priority and outlines existing and planned measures, including Autumn Budget bill reductions, the clean power mission, Great British Energy, and the Warm Homes Plan, to address this goal.
8
Conclusion
Acknowledged
There is a critical need to provide greater, targeted bill support for low income and vulnerable consumers throughout the year in the form of a social tariff. We are concerned by the lack of progress to date. (Conclusion, Paragraph 34)
Government Response Summary
The government acknowledges the need for more targeted support for vulnerable households and indicates it will consider 'all options for future bill support' as part of a consultation on extending the Warm Home Discount and a review of the Fuel Poverty Strategy.
10
Conclusion
Rejected
The criteria for triggering the Cold Weather Payment is set too high and does not reflect the impact that extreme cold can have on vulnerable households. Inadequate and unpredictable payments, sometimes made weeks after a period of cold weather, do not give vulnerable households confidence to use their heating. This …
Government Response Summary
The government states it keeps policies under review but defends the current Cold Weather Payment criteria, explaining that the seven consecutive day period for below-freezing temperatures is considered a clear and reasonable measure of sustained cold.
12
Conclusion
Acknowledged
The UK is experiencing a severe energy debt crisis that shows little sign of abating. Millions of customers currently owe more than £4bn in debt and arrears, a record figure that has more than tripled in just five years. This is having a devastating impact on the wellbeing of millions, …
Government Response Summary
The government acknowledges the severe energy debt crisis and the ongoing impact of the energy price crisis, but mainly describes Ofgem's reforms to price control mechanisms to prevent future windfall profits and ensure value for money, without committing to specific government action on a permanent debt relief scheme.
13
Conclusion
Acknowledged
While millions of consumers struggle with energy debt and the fallout of the recent energy price crisis, there is no shortage of money in the wider energy system. It is completely inexcusable that while households are forced to ration energy and choose between heating and eating, energy networks have enjoyed …
Government Response Summary
The government acknowledges the energy debt problem and details Ofgem's active reforms to price control mechanisms (RIIO-3) to prevent future windfall profits by strengthening controls and cutting the link with inflation, which it states should deliver value for money.
14
Conclusion
Not Addressed
Ofgem should introduce an ambitious Energy Debt Relief Scheme, funded by windfall profits made by energy network companies, that has broad eligibility and provides support automatically, without consumers having to apply or agree a repayment plan. The regulator should consult, by spring 2026, on a more permanent scheme to provide …
Government Response Summary
The government's response focuses on Ofgem's ongoing price control reforms (RIIO-3) to prevent future windfall profits and manage existing debt recovery mechanisms, but does not address the recommendation for Ofgem to introduce an Energy Debt Relief Scheme or consult on a permanent debt forgiveness scheme.
15
Conclusion
Acknowledged
It is unjustifiable that financially vulnerable customers are expected to pay more for their energy under the Energy Price Cap because of their chosen payment method. This constitutes a poverty premium. (Conclusion, Paragraph 57)
Government Response Summary
The government acknowledges the belief that all consumers should pay a fair price and outlines the Energy Price Cap's purpose, noting Ofgem's responsibility for its methodology. It further describes the Warm Homes Plan as a significant investment to make bills affordable for vulnerable households, without directly addressing the 'poverty premium' related to payment methods.
16
Conclusion
Acknowledged
Time-of-use tariffs that allow customers to optimise the benefits of low carbon technologies such as heat pumps, electric vehicles and solar panels are welcome additions to the retail market, rewarding customers with low energy prices and supporting flexibility of the energy system. However, they are mostly designed for affluent consumers, …
Government Response Summary
The government acknowledges the belief in fair energy prices and highlights the existing Energy Price Cap and the Warm Homes Plan, a significant investment in home upgrades to reduce bills for vulnerable households, but does not directly address the concerns about time-of-use tariffs deepening inequalities or the need for a social tariff.
17
Conclusion
Not Addressed
Ofgem should set the Energy Price Cap at an equal level for all customers, regardless of their chosen payment method, taking effect from the price cap period January to March 2026. It must also ensure that customers who are in energy debt are given greater flexibility to switch their supplier …
Government Response Summary
The government's response explains the existing role of the Energy Price Cap and Ofgem's responsibility for its methodology, and highlights the Warm Homes Plan to make bills affordable, but does not address the specific recommendations for Ofgem to equalize the price cap for all payment methods or provide greater switching flexibility for customers in energy debt.
18
Conclusion
Accepted in Part
We welcome Ofgem’s ambition to reassess how costs are allocated across consumer energy bills, but we are unconvinced that its proposals for a mandatory zero or low standing charge tariff option will go far enough to address the inherent unfairness of the existing arrangement of standing charges. Moreover, while consumers …
Government Response Summary
The government agrees with offering choice and lower standing charges, citing a published consultation to move Warm Home Discount costs to the unit rate, which would reduce standing charges by £39 for typical households from April. It also mentions Ofgem's review of disconnections and a future Call for Evidence in 2026 on gas network transition, but doesn't directly address the committee's specific concerns about the sufficiency or risks of Ofgem's mandatory zero/low standing charge tariff proposals.
19
Conclusion
Not Addressed
Ofgem should exempt customers from having to pay the gas standing charge if they convert their home to electrical heating and no longer otherwise need a gas service. They should also work with retailers so that the accumulation of standing charges over the summer months by pre- payment meters do …
Government Response Summary
The government's response mentions a consultation to reduce standing charges by moving Warm Home Discount costs to the unit rate and discusses future reviews related to gas disconnections and network transition, but does not address the specific recommendations for Ofgem to exempt gas standing charges for electric heating converters, tackle summer standing charge accumulation for pre-payment meters, or cap standing charges at 50% for pre-payment meters.
20
Conclusion
Accepted
Ofgem should reassess the outcomes of its Targeted Charging Review and consult on how increased network costs resulting from a sharp increase in investment in electricity infrastructure could be allocated more broadly, including across wider parts of the energy system. It should complete this process by summer 2026. (Recommendation, Paragraph …
Government Response Summary
The government confirms that Ofgem is conducting a Cost Allocation and Recovery Review (CARR), which includes electricity network charges and investment costs, to determine how fixed energy system costs are allocated. Ofgem published a Call for Input in Summer 2025 and will conduct a full consultation on options.
21
Conclusion
Deferred
Energy bills are generally becoming more accurate, but the high cost of energy means that when billing issues do occur, the impacts are felt far more severely. In an era of smart metering, it is unacceptable that back bills are being issued more than a year after energy was used, …
Government Response Summary
The government acknowledges the issue of inaccurate bills and notes Ofgem is undertaking a broad assessment of billing rules, including back billing, with consultations extending to January 2026. The government is also consulting on strengthening the Energy Ombudsman's powers and reviewing the Guaranteed Standards of Performance.
22
Conclusion
Deferred
Ofgem should limit the back billing period to six months for customers with a smart meter. It should also publish annual data on the penalties it gives energy suppliers for breaching its back billing rules. (Recommendation, Paragraph 79)
Government Response Summary
The government states this is a matter for Ofgem, which is currently undertaking a broad assessment of billing rules, including back billing, with consultations due by late January 2026. The government does not commit to the specific six-month limit or data publication but supports better redress mechanisms.
23
Conclusion
Deferred
The smart meter rollout has been sluggish, unreliable and has failed to achieve adequate coverage across Great Britain. Poor levels of reliability mean that many consumers are unable to benefit from more accurate billing, which has increased the occurrence of billing issues. It also limits access to flexible tariffs and …
Government Response Summary
The government acknowledges the smart meter rollout issues and has consulted on a new policy framework for 2026-2030, proposing updated smart meter rollout targets by 2030 and more stringent requirements for suppliers to ensure meters are functioning in smart mode within 90 days. Responses to the consultation are currently being analysed.
25
Conclusion
Accepted
For most consumers, the Energy Ombudsman provides a good service and we welcome proposals to strengthen its powers and make referrals automatic. However, without statutory backing, the Energy Ombudsman remains toothless, which undermines the confidence of consumers to seek redress and emboldens suppliers to ignore its rulings. Thousands of consumers …
Government Response Summary
The government agrees that too many Energy Ombudsman (EO) rulings are not implemented and is proposing to create an explicit legal obligation on suppliers to implement rulings and to explicitly designate the EO through legislation. Decisions on financial penalties for non-implementation are subject to ongoing consultation by the government and Ofgem.
26
Conclusion
Deferred
We have reservations about the Government’s proposal to reduce the time before a case can be escalated to the Energy Ombudsman from eight to four weeks. This would likely inflate the volume of cases referred to the Ombudsman, which might slow down the process for consumers to achieve redress and …
Government Response Summary
The government acknowledges the concerns regarding its proposal to reduce the Energy Ombudsman escalation period and states it is keen to identify exceptions to shortened timescales. It expects to publish an update on its consultation after carefully considering stakeholder views.
28
Conclusion
Not Addressed
All small and micro sized businesses should be covered by the Energy Ombudsman to provide a streamlined and widely understood process for dispute resolution across the entire sector. The maximum pay award that the Energy Ombudsman can grant to businesses should be increased to £50,000, to reflect the scale of …
Government Response Summary
The government response does not address the recommendation to cover all small and micro businesses by the Energy Ombudsman or to increase its maximum pay award to £50,000. It focuses on strengthening the EO's general powers and implementation of rulings for consumers.
29
Conclusion
Accepted
High energy costs pose an existential threat to many UK industries and are among the greatest concerns facing businesses of all sizes. The UK’s industrial electricity prices are the highest in Europe and around four times higher than the US and Canada, which places UK businesses at a severe competitive …
Government Response Summary
The government acknowledges the challenges of high industrial electricity prices and outlines existing support, including increasing electricity network charge discounts to 90% for energy-intensive firms and delivering the new British Industrial Competitiveness Scheme to reduce electricity costs for up to 7,000 businesses. It is also issuing a call for evidence this year on developing the Corporate Power Purchase Agreement market.
30
Conclusion
Accepted in Part
We welcome support to reduce industrial energy costs in the Industrial Strategy but this does not go far or fast enough. Support for just a limited number of businesses underestimates the scale of the challenge and we are concerned that many businesses will not survive until support is introduced in …
Government Response Summary
The government acknowledges the challenges and states that the new British Industrial Competitiveness Scheme (BICS) will reduce electricity costs for up to 7,000 businesses and be available to eligible businesses regardless of size, addressing the call for SME support. It also highlights other support schemes, reiterating its targeted approach.
33
Conclusion
Accepted
We are greatly concerned by exploitative practices in the non-domestic energy market, especially instances of mis-selling and pressure selling, as well as excessive deposits and out-of-contract rates. These practices exploit resource-poor business owners who often lack the time and knowledge to procure a good energy deal. (Conclusion, Paragraph 116)
Government Response Summary
The government acknowledges the committee's concern about exploitative practices in the non-domestic energy market and details ongoing actions, including support for microbusinesses, dispute resolution via the Energy Ombudsman, and plans to appoint Ofgem to regulate energy brokers.