Recommendation 47

HM Government Accepted

The government has set out decisive action to support people and businesses with their energy bills and tackle the root causes of the issues in the UK energy market through increased supply – ensuring the country is not left in the same position again. On the 8 September Government announced that from 1st October, a new ‘Energy Price Guarantee’ which will mean a typical UK household will now pay, on average, no more than £2,500 a year on their energy bill for the next two years. This is automatic and applies to all households, with an equivalent level of support made available to households in Northern Ireland as in Great Britain. This will save the average household £1,000 a year based on current energy prices from October and is in addition to the £400 energy bills discount for all households. Through a new government Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households. It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November. As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills. Whilst the intervention is being funded by Government, action is being taken to reduce the cost over time. To deliver this Government is creating a new Energy Supply Taskforce to negotiate with domestic and international suppliers on long term contracts. The Bank of England will be working with HMT to address liquidity issues faced by energy firms and work is continuing to accelerate our domestic energy supply and increase our energy resilience by making UK an energy exporter by 2040. This latest support is in addition to the £37 billion package of support announced earlier this year to help households with cost of living, targeting the most vulnerable households. That support includes a £11.7 billion Energy Bills Support Scheme, worth up to £400 each for around 29 million households. In addition, targeted support includes: • More than 8 million households on means tested benefits who will receive a payment of £650. • Over 8 million pensioner households who receive the Winter fuel Payment will also receive a £300 Cost of Living Payment. • Six million households who receive disability support will receive £150 Disability Cost of Living Payment • Warm Home Discount, providing a one-off payment of £150 this November. • The Cold Weather Payment, which is a £25 payment for vulnerable households on qualifying benefits, is also available to help with the cost of bills when the weather is or expected to be unusually cold. • A £144 million discretionary fund for local authorities to distribute to those identified as in need. The Government has already announced a package of support that will see eight million of the most vulnerable households receive £1200 of one-off support to help with the cost of living, with all domestic electricity customers receiving at least £400.