Consumer Energy Bills: Government Support

(Limited Text - Ministerial Extracts only)

Tuesday 27th January 2026 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)]

It is a pleasure to serve under your chairship, Ms Jardine, I think for the first time. We could probably have done with a longer debate given how many people intervened at the start, but I thank the hon. Member for Sutton and Cheam (Luke Taylor) for securing this debate and for giving us the opportunity to debate an important issue, which I know lots of Members across the House have an interest in.

I associate myself with the hon. Member’s remarks about the situation in Ukraine. Last year, when I attended the G7 Energy and Environment Ministers meeting, I met the then Ukrainian Energy Minister. I was struck by the sheer scale of what she was facing every day, such as sending energy workers into the field to repair broken transmission lines and substations—not just facing the risks that any worker faces in situations with high voltage cables, but also facing the risk of Russian drone attacks and bombs. I could not be clearer in condemning the actions of the Russian regime and what they are doing in targeting infrastructure at this time.

As I draw this debate to a close, I want to reaffirm that tackling the affordability crisis is this Government’s No. 1 priority. The main reason that bills are so high, as the hon. Member for Sutton and Cheam alluded to, is the wholesale cost of gas and our exposure to price shocks caused by our dependence on fossil fuel markets. We are working to bring down, for good, the cost of energy by taking back control of our energy system through our clean energy superpower mission. Thanks to our decisions, last year was a record year for wind and solar power, and we have embarked on the biggest nuclear building programme for half a century. Already in 2026, the Government’s seventh contracts for difference auction secured an incredible 8.4 GW of new offshore wind capacity across Britain—enough to deliver energy for more than 12 million homes. That is what it means to deliver on lower bills, good jobs and energy security. I have to look at the Opposition Benches, which are empty this afternoon, and think about the work that those Members could have been doing in government over the past 14 years to take us to a position where we would have been less reliant on fossil fuels and not facing such fuel shocks. I suppose it is no surprise that they did not turn up to defend their record.

Notwithstanding the concerns voiced by hon. Members this afternoon, which I share, energy bills are starting to come down. In real terms, Ofgem’s price cap was lower in 2025 than in 2024, but we know we need to go further. The Government’s intervention at last year’s Budget will help people deal with cost of living pressures, by taking an average £150 of costs off energy bills from April 2026. By closing the ECO scheme and providing Exchequer funding to reduce the cost of the renewables obligation for domestic energy suppliers, this Government are turning a corner by putting more money in people’s pockets in 2026.

At this point, I want to address the point made by the hon. Member for Yeovil (Adam Dance), who raised the issue of an ECO project affecting one of his constituents. I ask him to send me the details of that case in writing, so that we can investigate it fully. In addition to the £150 off energy costs, we have expanded the warm home discount scheme this year, so that more households will benefit from its support. That means that up to 6 million households will receive a £150 rebate on their energy bills this winter. In Sutton and Cheam, over 2,800 households received the warm home discount last winter; we expect that to increase significantly this year. Under the expansion across London, for example, 950,000 households will benefit from the warm home discount this winter. That is money going on to people’s energy bills and bank accounts, now. I recognise how important that support is to households across Britain over the winter months. That is why we have proposed continuing the warm home discount scheme for a further five years, up to winter 2030-31.

A number of hon. Members raised the warm homes plan, and I will address some of those issues in a moment. The hon. Member for Sutton and Cheam said we needed an ambitious plan; that is precisely what the warm homes plan that we announced last week is. Reducing bills is not just about discounts, whether that is £150 off costs or the warm home discount; it is also about transforming an ageing building stock into comfortable, low-carbon homes that are cheaper to heat and fit for the future.

As my hon. Friend the Member for Manchester Rusholme (Afzal Khan) highlighted, the warm homes plan is a vital step in the Government’s mission to address the long-term issue of energy affordability in this country. It is the biggest ever public investment in home upgrades and will help millions of households benefit from solar panels, batteries, heat pumps and insulation.

The hon. Member for Chippenham (Sarah Gibson) talked about the priority afforded to different measures. I reassure her that we are not suggesting that insulation is not important. I am sure she has read the warm homes plan and will have seen the pages that deal specifically with insulation. Insulation plays an especially important part in the local government schemes we are running. With the offer of consumer loans and the work we are doing with finance organisations, there will be an opportunity to finance the retrofit of homes.

The hon. Lady highlighted how technology is changing. She talked about the electric boiler, which I have seen myself. We have been looking at lots of different technologies that could deliver and have already made changes, for example, to the boiler upgrade scheme, which is now offering heat batteries and air-to-air heat pumps as well as traditional heat pumps. We are always on the lookout for new technologies.

[Sarah Gibson]

I was aware that the Minister had seen the boiler I mentioned. I welcome the warm homes plan immensely, but I have a slight worry about it. There is the old saying that doing the same thing again and expecting a different outcome is a sign of madness. My hon. Friend the Member for Yeovil (Adam Dance) highlighted that the previous scheme failed to do the right things at the right time, due to a lack of scrutiny and accountability. I have not seen anything in the warm homes plan that talks of an overview to ensure that a heat pump is installed only when it needs to be, since airtightness and insulation would be more appropriate first.

[Martin McCluskey]

To address those points: the warm homes agency, which is part of the plan, is there to provide advice and guidance to consumers from the start to the end of the retrofit journey. That is about increasing the level of advice and guidance available. I understand that retrofitting a home is challenging and that people need advice and guidance to do it effectively, as the hon. Lady noted.

As for oversight, there has been a problem in the past, as we saw with the number of issues around the ECO4 programme. The warm homes plan states clearly that we will consult on the protection available to consumers through the course of this year. As the Minister responsible, I never want to see an issue like ECO4 again. We need to make it as easy as possible. We should ensure that problems do not occur in the first instance, but when they do there must be proper adequate redress, so that there is confidence in the system. We cannot expect people to make these changes without confidence in the system.

The warm homes plan will roll out upgrades to up to 5 million homes by 2030, saving households hundreds of pounds on energy bills and helping lift up to 1 million families out of fuel poverty by 2030. We are providing £5 billion of targeted support for low-income households, which will receive free upgrades, including heat pumps, solar panels and batteries. That includes additional funding for the very successful warm homes local grant, and the warm homes social housing fund for local authorities and social landlords to upgrade homes for those on low incomes and in social housing. Those upgrades can provide a significant saving for a typical household of £550 a year on their bills. Alongside that, we have allocated £5 billion to a new warm homes fund, almost £2 billion of which will go to the provision of low or zero-interest loans. That will make it easier for more people to meet the up-front costs of upgrading their homes in order to benefit from lower bills.

About 30% of private rented sector tenants live in fuel poverty. We are introducing new minimum energy efficiency standards for the private rented sector and the social rented sector, which will save renters hundreds of pounds a year and ensure that they have decent, warm homes. I am confident that the landmark plan that we have announced will make people across Britain better off, secure our energy independence and do right by future generations by tackling the climate crisis.

One of the effects of the affordability crisis has been to increase consumer debt, which remains at a record level. Reducing debt not only helps those in debt but cuts the cost of managing debt for all consumers. I recognise the need to tackle that problem, and I have been working closely with Ofgem to do that. In November, Ofgem published an updated debt strategy that set out its near-term actions and priorities in supporting suppliers to reduce debt in the sector. It includes proposals for a debt relief scheme to tackle the debt that some consumers built up during the energy crisis; that could reduce aggregate debt.

I commend my hon. Friend the Member for Portsmouth North (Amanda Martin) for arranging the coffee morning and the energy support event. I believe that many Members are doing similar things; they have received a lot of support from energy suppliers and other organisations. She said that she has had conversations with Checkatrade and with people in the building trade. I said a moment ago that we are ensuring high levels of consumer protection to protect not just consumers but those in the building trade. Whenever I meet them, they ask for reliable regulation and standards that they can adhere to. The vast majority of builders, who are maintaining a high standard, do not want their reputation trashed by people who are not meeting those high standards.

The energy system is changing. We have more clean power and innovative tariffs, such as time of use tariffs, and the use of technologies such as heat pumps and electric vehicles has grown. That means that we need solutions fit for 2030 and beyond. Ofgem is currently conducting a cost allocation and recovery review to look at how costs on energy bills can be recovered in the future, and it is considering factors such as efficiency, fairness, meeting our net zero commitments, ensuring growth, and how we pay for our energy system. I am keen that that ensures that progressivity is at the heart of the way people pay for their energy.

The hon. Member for Sutton and Cheam spoke about a social tariff, which I know a lot of hon. Members would welcome, but I am always thoughtful about how we make sure that is properly targeted. For that, we need reliable data. We have just launched a kick-starter project with the Department for Science, Innovation and Technology and the Department for Energy Security and Net Zero, which is about accurately finding reliable household income data and properly targeting energy interventions—I would be happy to discuss that in more detail with the hon. Gentleman. It is vital to ensuring that energy costs and bills reflect the changing market.

We are bringing energy bills down for everyone with the actions that we will be taking in April, and we will continue to search for other ways to do so. We are lowering bills through the delivery of the Budget’s bill reduction measures. We have expanded the warm home discount, and are delivering the record-breaking warm homes plan. We are working with Ofgem to future-proof how costs are managed, and are taking action to fund a cleaner, more secure energy system. We will achieve bill savings while taking back control with home-grown clean power. That is the route to cheaper energy in the long run. Every wind turbine that we turn on and every piece of new technology that we adopt helps us reduce our reliance on fossil fuels, including gas, and ensures that we get costs down in the long run. That is the only way to protect the British people and bring down bills for good. That is what the Government’s clean energy mission is all about.

Question put and agreed to.