Warm Home Discount (Scotland) Regulations 2026

Lord Whitehead Excerpts

Monday 27th April 2026 Grand Committee

Moved by

[Lord Whitehead]

That the Grand Committee do consider the Warm Home Discount (Scotland) Regulations 2026.

[The Minister of State, Department for Energy Security and Net Zero (Lord Whitehead) (Lab)]

My Lords, these regulations were laid before the House on 17 March 2026.

Since 2011, the warm home discount has supported low-income and vulnerable households by reducing energy bills during the coldest months of the year, when support is most needed. The Warm Home Discount (Scotland) Regulations 2022 ended on 31 March 2026. These regulations will extend the scheme in Scotland for a further five years, until 2030-31, providing certainty for households, suppliers and delivery partners.

Fuel poverty is a devolved matter in Scotland. Under the Energy Act 2010, as amended by the Scotland Act 2016, Scottish Ministers have powers to design their own fuel poverty scheme, subject to consultation with and agreement from the Secretary of State. To date, Scottish Ministers have chosen not to exercise those powers and have instead consented to the UK Government laying regulations on their behalf. That remains the position for the next scheme period. Under devolution arrangements, the Scottish Government have provided their formal consent for these regulations to be made.

In September, the Government consulted, with the agreement of the Scottish Government, on proposals for the next scheme period. Consultation responses relating to Scotland were shared with Scottish Ministers, who have determined the eligibility criteria for the next scheme period within the agreed spending limit, as set out in these regulations.

The regulations will continue to require energy suppliers with more than 1,000 domestic customer accounts across Great Britain to participate in the scheme. Suppliers with fewer than 1,000 domestic accounts will, as now, be able to participate in the scheme on a purely voluntary basis.

These regulations will continue to provide for £150 rebates to be provided by scheme suppliers under the data-matched core group and the application-based broader group, a different division of groups than is the case with the English scheme. Participating suppliers will continue to be obliged to provide a £150 rebate to eligible households in the core group, applied directly to their electricity bill. These regulations set out new eligibility criteria for the core group in Scotland, aligning qualifying benefits with those of the Scottish winter heating payment as of December 2025 for the next scheme period. It is estimated that the number of households that receive a core group rebate will increase by roughly 250,000 to 345,000 households per year compared with 2025-26.

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[Lord Moynihan (Con)]

My Lords, I too thank the Minister for bringing forward this SI and explaining it in such detail, especially given the fact that we have already debated this at some length, when my colleague from the Liberal Democrat Benches also participated in certain aspects of it.

The focus on Scotland allows us to look at some specific aspects relevant there and to consider why the Warm Home Discount (Scotland) Regulations 2026 are so important for Scottish households—needed as they are, I might add, because of the high cost of energy and electricity in not only Scotland but the rest of the United Kingdom, because of the doubling down on the policy of building intermittent wind farms far from the grid and energy costs that are sky high relative to international comparisons. With those wind farms operating at some 31% to 40% of their maximum potential capacity, we are required to continue to import gas and to pay for gas-fired CCGTs all year long for the sole purpose of being available when the wind does not blow and the sun does not shine. For that reason, it is all the more important that this draft warm home discount provision is available—because of the high prices of electricity and the need to protect those most in need in Scotland.

We understand how important this is, since the warm home discount is being immediately offset for so many by rising energy prices, driven by the Government’s own policy choices. It is important to note that suppliers are not funding this support; it is paid for by households through an additional levy. The Government are increasing taxes on working people to fund handouts to others, rather than fixing the problem at source by addressing the issue of making electricity cheap.

In addition, the administration costs will continue to rise. I would be grateful if the Minister could confirm whether the administration costs alone are estimated to be about £20 million per annum. It is time the Government addressed the need to cut electricity bills. We hope that during the brief coming recess, DESNZ will have the opportunity to see whether it can axe the carbon tax, scrap renewable subsidies and overturn the North Sea licensing ban. That will provide the greatest benefit to people on low incomes, not least vulnerable Scottish customers.

As the Minister has said, the WHD scheme supports those on low incomes, vulnerable to cold-related illness, or living wholly or mainly in fuel poverty. That is of course right—it is a policy that has been supported by both sides of the Committee. We need to target fuel-poor households, with the highest estimated energy costs identified through data matching, which we covered when we last discussed this important measure in the context of the rest of the United Kingdom.

I welcome the recognition of the Secretary of State being able

“to direct energy suppliers to communicate with ‘matched’ customers identified through automated data matching, and … requiring suppliers to provide information on eligibility, the use of automated decision-making, and where to find the Scheme’s privacy notice”.

We already agreed to that in a previous debate on the application of the WHD extension elsewhere in the United Kingdom. However, the Minister will not be surprised to hear me say that we should also consider Professor Dieter Helm’s concern that, in not considering the WHD orders in the context of the wider energy policy being pursued by the Government, we are, to use his words, simply “moving the deck chairs”. The most important issue is that the warm homes discount scheme must be judged in the context of the fundamental issue of energy costs, and, most importantly, the high energy costs that make us so lacking in competition, particularly in the UK industrial sector but also in terms of very high domestic costs.

For many of the people concerned, fuel is perhaps the most important and noticeable change in energy prices for low-income households. Only recently, industry chiefs have warned that British electricity costs mean that domestic refineries are struggling to compete, and therefore that Britain will be increasingly reliant, as will Scotland, on imported fuel. Average petrol prices, at 157.62p a litre, are currently 25p higher than at the start of the war, and diesel has risen twice that to 188.9p a litre. Does the Minister recognise that, as the war has proven, it is important for a major economy to be focused on increasing its reliance on domestically generated fuel and not on imported fuel? This issue of security of supply is one I hope that we will return to and that the Minister can also address today.

We still import 60% of our gas, which is around 20% of our national energy demand. I hope that, during the brief Recess, the Secretary of State will reconsider his refusal to allow production at remaining North Sea gas fields, particularly Rosebank and Jackdaw, and that, at least recognising that there may be political motivation behind his decision, he will return to this subject shortly after the 7 May elections. As we know, when we look at Rosebank and Jackdaw, the emissions intensity is substantially lower than imported LNG from the United States. Therefore, on any environmental grounds, it makes great sense to develop our own gas reserves, not to mention the benefit to the Treasury of the revenues that are generated.

In the context of Scotland, we are losing nearly 1,000 jobs a month in Aberdeen—1,000 valuable jobs that are highly regarded around the world. It is so important to recognise that, from Aberdeen to Ardersier, we need to make sure that we protect jobs in Scotland and that this policy of being completely opposed to new licences, and not adjusting the commercial and fiscal terms that would encourage the extension of current production in reservoirs and tie-backs, is very damaging to the economy, puts up prices and, in turn, means that, in future, more people may have to avail themselves of the regulations we are discussing today.

We are approaching a brief break, which is an opportunity to test how popular the Government’s energy policies are in Scotland. I hope that this will allow DESNZ to undertake a comprehensive review of its doubling down on an energy policy that is high-cost—one of the highest in the world—and regrettably more polluting than it needs to be. I gave the example of LNG imports from the US against our own production from, for example, Rosebank and Jackdaw.

We are increasingly highly reliant—I know that the Minister will always expect me to say this—on Chinese solar imports from Uyghur slave labour and coal-fired factories. We are also highly dependent on ever-enlarging warm home discount schemes, which, we both agree, are a fundamental responsibility of parties in government. However, those schemes, which should be welcome because they ease some of the consequences of these policies, do not deter us from the most important issues: addressing the policies and reducing the cost of energy. Ultimately, if we can do those things, such policies will be less necessary because we will have addressed the facts that we need to be more competitive, that energy needs to be more affordable and that we need to protect jobs—not least in Scotland—which are absolutely vital to our economy and our energy mix.

[Lord Whitehead (Lab)]

I thank noble Lords for their valuable contributions to this debate; I will attempt to address them in the best way I can.

I have got to know the noble Lord, Lord Moynihan, well during my time as a Minister in this House. I say to him, with respect, that, although he is unfailingly constructive and courteous and makes important points, I fear that he has today given us a tour d’horizon of all the things we have been discussing over the past few months, wrapped within the carapace of the SI before us, which relates only to the specific Scottish circumstances of the warm home discount scheme. I hope he will forgive me if I do not give a detailed reply to some of his points because they have been discussed on other occasions; perhaps we could, over a drink at the end of the Session, tease out some of these issues between ourselves as we prepare for the proroguing of Parliament.

On the contributions concerning this specific SI, I thank the noble Lord, Lord McNicol, for his contribution. His concerns relate to the enormous increase in coverage that has been achieved by these new arrangements. Because the Scottish Government asked the UK Government to set up an SI for a scheme similar, but not identical, to that in the rest of the UK, the benefits of the substantial increase in coverage now relate to Scotland and England just the same. However, there are of course questions relating to the fact that there are, and have been since 2011, considerable differences between some of the detail of the Scottish scheme and the English one. That is partly because of the identification of virtually everybody who is taking part in the expanded scheme in England, but it is not quite so as far as the Scottish scheme is concerned.

In the Scottish scheme, there is a core group and there is a broader group. The broader group is subject to identification by application and is then put into the assistance system by the energy suppliers, but there is a question about whether those energy suppliers are going to do that properly. How will it be ensured that they do, and, if they fall short, how can that be rectified by things such as making sure that industry initiatives are brought up so that the broader group does not suffer in the way that it might otherwise do? It is down to the Scottish Government and Ofgem to make sure it happens, but it is clearly something that we need to keep a close eye on as the scheme develops.

I say to the noble Lord, Lord Moynihan, that the Government are taking action on energy prices and bearing down on them. As he will know, we have the energy price cap, which has made sure that prices go down by about 7% over the next few months. We have had the transfer of renewables obligation levies and the ending of eco-levy costs to reduce bills. We have an ambition to take considerably more off energy bills in the future using those sorts of devices.

The noble Lord talked about domestically produced fuel. We completely agree on the need to have domestically sourced power in the UK. That is exactly what the Government are doing with increased offshore wind and solar. I have already talked to the noble Lord about how we can increase the amount of domestically produced onshore gas by increasing the biomethane that is injected into the grid—a completely domestic source of gas. The Government are acting on these things.

The noble Lord quoted Dieter Helm, saying that we are only moving the deckchairs. Sometimes moving deckchairs is a good thing, particularly if the deckchairs were previously in the shade and you can bring them out into the sun by the things you are doing. For example, one of the things that we are doing here is to move the effect of the funding from standing charges to individual markers related to the amount of power that is being consumed by particular customers. Instead of that money being taken for these warm home discount schemes from standing charges, they will be a combination of matters now, which will save people something like £39 on standing charges. So yes, we can move the deckchairs. I am conscious that we need to move further and faster—to move more deckchairs more rapidly—and transcending that. If this measure is about moving deckchairs, the deckchairs have been moved very efficiently and we have a good scheme as a result.

[Lord Fuller (Con)]

I listened careful to all the deckchairs moving around, but the Minister’s analogy is incomplete, because the deckchairs that are referred to in the famous aphorism relate to the deckchairs on a sinking ship. That is the pointlessness of some of the things we are looking at. It is important that, rather than rearranging the deckchairs on a sinking ship, where everybody goes down with the vessel, we look at keeping energy prices as low as we can. The high energy prices that this nation is labouring under are de-industrialising our nation, killing our chemical industry and giving everybody the highest energy costs in the industrialised world. That is something we need to bear down upon.

[Lord Whitehead (Lab)]

As I was just saying to the noble Lord, Lord Moynihan, moving the deckchairs depends on the fact that the ship is not sinking. Of course, this ship is not sinking. That is why we have been able to double the eligibility for people to take part in the scheme and are further doubling down on energy price reductions through the devices that I set out and the further development of clean, domestically produced power to make sure those prices stay low for the future. We are doing other measures, such as de-linking the arrangements between gas-based electricity and renewables-based electricity. The purpose of a number of things might seem to be moving the deckchairs, but certainly not on a sinking ship. The ship has all its deckchairs in the sun now and is steaming forward to a bright energy future.

Motion agreed.

Committee adjourned at 5.10 pm.