Recommendations & Conclusions
6 items
13
Conclusion
19th Report - Energy Bills Support
Deferred
The Department acknowledged that it does not have “a full answer at this stage” to the issues with matching income data with energy supplier data, despite it being almost three years since the spike in energy prices.31 Fair by Design highlighted that combining wider data from different departments alongside supplier …
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The Department acknowledged that it does not have “a full answer at this stage” to the issues with matching income data with energy supplier data, despite it being almost three years since the spike in energy prices.31 Fair by Design highlighted that combining wider data from different departments alongside supplier data to target money to those who need it the most is not happening.32
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Government response AI summary
The government is taking the opportunity to review options for better targeting of future bill support beyond March 2026, and is working with other government departments, energy suppliers, and stakeholders to consider options for improving data sharing and data matching by September 2025.
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HM Treasury
19
Conclusion
19th Report - Energy Bills Support
Deferred
Alongside a rise in energy prices, Ofgem statistics from June 2024 show the total owed by domestic consumers for both electricity and gas was over £3.7 billion compared with £1.8 billion at the end of 2021.51 A report by Clear Consultancy Services suggested that millions of people are living in …
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Alongside a rise in energy prices, Ofgem statistics from June 2024 show the total owed by domestic consumers for both electricity and gas was over £3.7 billion compared with £1.8 billion at the end of 2021.51 A report by Clear Consultancy Services suggested that millions of people are living in cold conditions and cutting back on essential costs such as food; and concluded that “energy is the fastest growing type of debt presenting at debt advice services”.52 The same report also concluded that the value of energy debts rose by 33% between 2022–23 and 2023–24.53 It also suggested that “the majority of debt advisers said that energy suppliers are the worst, or one of the worst, categories of creditors that they deal with.” 44 Q 32; C&AG’s Report, infographic on page 6 45 C&AG’s Report, para 9; Q 28 46 Qq 32, 33 47 Qq 42, 43 48 C&AG’s Report, para 4.7 49 Qq 44, 45 50 EBS0002 51 C&AG’s Report, para 4.6 52 Clear Consultancy Services, Supporting households in energy debt, February 2025 53 Clear Consultancy Services, Supporting households in energy debt, February 2025 12
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Government response AI summary
The government disagrees and proposes that Ofgem, as the market regulator, is better suited than DESNZ to collect pertinent information and evaluate the guidance provided to energy customers experiencing debt. They are actively working with Ofgem to refine these processes.
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HM Treasury
20
Conclusion
19th Report - Energy Bills Support
Deferred
The Department recognised this as a serious issue. It made clear that, because in the first instance consumers facing energy debts should contact their energy supplier, the regulatory regime should that require suppliers to offer “good, accurate and helpful advice” and that the Department was expecting this of Ofgem. It …
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The Department recognised this as a serious issue. It made clear that, because in the first instance consumers facing energy debts should contact their energy supplier, the regulatory regime should that require suppliers to offer “good, accurate and helpful advice” and that the Department was expecting this of Ofgem. It told us that it was exploring options around the issues of the support and advice [that energy suppliers] offer consumers. 54 The Department said it has started a review of Ofgem which is looking to make sure it has the powers and capabilities it needs to address any poor outcomes for consumers.55 It is also working with Citizens Advice on whether more could be done to provide a “stronger debt advice service” for consumers.56 It also told us that it was working closely with Ofgem as it is consulting on and preparing its new consumer debt strategy.57 Written evidence we received from Fair by Design highlighted concerns, however, that a debt relief scheme proposed by Ofgem will not implemented until winter 2025.58 54 Q 52 55 Qq 53, 67 56 Q 52 57 Q 53 58 EBS0008 13 2 Responding to future energy price volatility Reducing electricity bills
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Government response AI summary
The department proposes that Ofgem, as the market regulator, is better suited than DESNZ to collect pertinent information and evaluate the guidance provided to energy customers experiencing debt and is working with Ofgem to refine these processes.
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HM Treasury
21
Conclusion
19th Report - Energy Bills Support
Deferred
The United Kingdom has the highest price (including taxes and levies) for domestic electricity out of 25 International Energy Agency (IEA) countries reporting in 2023. Similarly, the UK has the highest price (including taxes and levies) for industrial electricity out of 24 IEA countries, again reporting in 2023.59 The price …
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The United Kingdom has the highest price (including taxes and levies) for domestic electricity out of 25 International Energy Agency (IEA) countries reporting in 2023. Similarly, the UK has the highest price (including taxes and levies) for industrial electricity out of 24 IEA countries, again reporting in 2023.59 The price of the UK’s electricity is almost four times that of its gas. This is partly because the government’s levy for environmental policy costs (such as schemes to support renewable energy development) accounts for over 10% of an electricity bill.60
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Government response AI summary
The government agrees rebalancing is needed and will set out proposals in due course, with a target implementation date of July 2025, but notes the complexity and difficult fiscal environment.
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HM Treasury
22
Conclusion
19th Report - Energy Bills Support
Deferred
The Department recognised that rebalancing was an important issue, given the ratio of electricity to gas prices was “high compared to many comparative countries” as a “lot of the policy [ … ] and network costs in this country are placed on electricity rather than on gas”.61 But it has …
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The Department recognised that rebalancing was an important issue, given the ratio of electricity to gas prices was “high compared to many comparative countries” as a “lot of the policy [ … ] and network costs in this country are placed on electricity rather than on gas”.61 But it has delayed addressing this issue for three years.62 The Department told us that it is important to address this issue in a way which is affordable and fair.63 This is because some households cannot avoid using gas and might see their bills increase if levies were moved from electricity to gas bills.64 The Department provided assurances that it was taking this issue seriously, but could not provide a timetable for completing its planned work on rebalancing.65
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Government response AI summary
The government agrees rebalancing is needed and will set out proposals in due course, with a target implementation date of July 2025, but notes the complexity and difficult fiscal environment.
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HM Treasury
23
Conclusion
19th Report - Energy Bills Support
Deferred
Three years ago, in April 2022, the previous government launched its Review of Electricity Market Arrangements (REMA) as part of its British Energy Security Strategy. This was the government’s flagship policy to enable a net 59 Q 68; Department for Energy Security and Net Zero, Quarterly Energy Prices UK April …
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Three years ago, in April 2022, the previous government launched its Review of Electricity Market Arrangements (REMA) as part of its British Energy Security Strategy. This was the government’s flagship policy to enable a net 59 Q 68; Department for Energy Security and Net Zero, Quarterly Energy Prices UK April to June 2024, September 2024 60 Committee of Public Accounts, Decarbonising home heating, Thirty-Seventh Report of Session 2023–24, HC 653, May 2024, paragraph 10; Qq 21, 22, 65 61 Q 21 62 Committee of Public Accounts, Decarbonising home heating, Thirty-Seventh Report of Session 2023–24, HC 653, May 2024, paragraph 11; Qq 21, 22 63 Q 21 64 Q 21 65 Q 22 14 zero power sector by 2035, subject to security of supply, while ensuring a fair deal for consumers.66 The Department aims to review how electricity prices are set for households so that they can benefit from cheaper rates if demand is low or when the weather means more energy is produced by intermittent renewable generation. The Department explained that decoupling electricity bills from fossil fuel prices would make them more stable and less exposed to international risks.67 The Department told us that it has “narrow[ed] down on a set of key decisions [it thinks] are important for shaping the market of the future”. The Department told us that it is committed to setting out its proposals “later this year”.68 Ensuring security of energy supply
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Government response AI summary
The government will publish a decision on whether to adopt Zonal Pricing or Reformed National Pricing by mid-2025, and will provide the Committee with a timetable for implementing the proposals for change.
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HM Treasury