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Household Energy Bills: Support

Volume 725: debated on Monday 19 December 2022

Following is a statement on energy bill support schemes.

Help with household energy bills—widening the support

On 29 July, details were announced of the energy bills support scheme, which is now providing a £400 discount on electricity bills to households across Great Britain, delivered over six months. On the same date we announced that energy bill support scheme alternative funding would be developed to deliver the same level of support to households without a domestic electricity account.

The Government announced further support in September with the energy price guarantee, which is reducing energy bills for households across the United Kingdom. It currently brings a typical household energy bill in Great Britain for dual-fuel gas and electricity down to around £2,500 per year and, at an equivalent level of support, in Northern Ireland to around £1,950 per year.

Energy policy is devolved in Northern Ireland and it would normally be the responsibility of Northern Ireland Ministers to put in place support for households with energy costs. In the absence of a functioning Executive but in consultation with Northern Ireland Ministers, the UK Government committed in August to develop and deliver a scheme comparable to that being delivered in Great Britain.

I am now able to update the House on both the energy bill support scheme alternative funding process in Great Britain and a scheme for Northern Ireland to ensure payments reach all eligible households this winter.

Energy bill support schemealternative funding

The energy bill support scheme alternative funding is for households in Great Britain who are not eligible for the energy bills support scheme which started delivering in October, as they do not have a direct relationship with a domestic electricity supplier. This includes many of the most vulnerable in our society. Those set to benefit include residents of park homes, some care home residents, tenants in certain types of private and social rented homes, homes supplied by private wires, residents of caravans and houseboats on registered sites, farmers living in domestic farmhouses without a domestic electricity connection, and households off-grid.

It is important to note that most households who do not have a direct relationship with a domestic energy supplier benefit from a discount on their energy bills through the energy bill relief scheme, which is already providing support to intermediaries such as landlords and park home operators. The Energy Prices Act 2022, passed earlier in the year, ensures those benefits are passed on to consumers who do not pay their energy bills directly to an energy supplier.

In January we will publish details on eligibility and open a portal on offering a short online application process for those eligible households to apply for energy bill support scheme alternative funding. A helpline will be available for those unable to apply online. Applications will be validated, and payments processed by the relevant local authority. The £400 Government credit will be paid this winter to all eligible households who apply.

Northern Ireland energy bill support scheme

For Northern Ireland we have developed and will deliver a separate and bespoke energy bills support scheme, working with the separate Northern Ireland electricity suppliers, and respecting the very different nature of the energy market in that part of the United Kingdom. This scheme will also deliver for households this winter, with payments starting in January.

The payment will be for £600, comprising £400 for the energy bills support scheme and £200 for the alternative fuel payment, which all Northern Ireland households will receive, given the high level of alternative fuel use. The single payment will reach customers through their supplier, either direct to the relevant electricity bill payer’s bank account, or as a voucher which will need to be redeemed into a bank account or as cash.

We are making funds available to suppliers for this purpose by the end of this year, so suppliers will be able to start paying customers in January.

A further announcement will be made in respect of alternative funding support for those in Northern Ireland without a domestic electricity supply.

I have also written to Northern Ireland energy suppliers setting out expectations for them to suspend all debt recovery and enforcement activity until the end of January, as well as to provide payment holidays until the end of January when customers are struggling to pay their bills.

Alternative fuel payment scheme

I can also set out today our intended timings for the £200 alternative fuel payment scheme for households in Great Britain who use fuels such as heating oil, LPG or biomass to heat their homes. Payments will commence in February, with most payments being made that month through electricity suppliers. More details about how we will target the scheme will follow soon in the new year. Households that will not receive automatic payments will be able to apply to the same portal used for the energy bill support scheme alternative fund from February.

The Treasury has approved these extensions to the energy bills support scheme.

I will continue to update Parliament.