Cost of Energy: Dalmarnock

Amanda Solloway Excerpts

Tuesday 24th October 2023 Commons Chamber

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

Let me begin by thanking the hon. Member for Glasgow Central (Alison Thewliss) for tabling this incredibly important debate on the cost of energy in Dalmarnock. She makes a strong case for her constituents and, as the Minister for affordability, I am mindful of the issues that she raises. That is why the Government spent nearly £40 billion protecting households and businesses from spiralling energy bills last winter. That included robust support for households, covering around half of a typical energy bill last winter through the combined support since October 2022 of the energy price guarantee and the energy bills support scheme, with a typical household saving around £1,500 by the end of June 2023. The energy price guarantee subsidised the per unit cost that a household could be charged for its gas and electricity usage. The typical household was therefore paying £2,500 a year for its energy when prices were at their highest, between October 2022 and June 2023.

To put that in context, the Ofgem price cap reached £4,279 for quarter 1 of 2023, which is what a typical household would have paid for its energy had the Government not intervened. Alongside the EPG, the energy bills support scheme delivered a £400 non-repayable Government discount on electricity bills to help 28 million households in Great Britain.

The hon. Lady mentioned the difficulties some people in her constituency faced in accessing energy support last winter, particularly those who were unable to be reached automatically. The EBSS alternative funding was available to over 900,000 households in Great Britain that did not have a domestic electricity supply and were not eligible to receive support automatically through EBSS, providing them with £400 to support them with their energy bills. I note the comments from the survey, and I am very interested, as we discussed before, to see the results of that survey.

The scheme remained open for three months from 27 February to 31 May, and the Government used a range of methods to ensure that as many eligible households as possible knew that they could apply. That included press notices to highlight the scheme in national and regional media, and a request for local authorities to write to care homes and park homes in their area.

The alternative fuel payment scheme delivered £200 to households that use alternative fuels such as heating oil, liquefied petroleum gas, coal or biomass, helping around 2 million off-gas-grid households to meet their energy costs last winter. The scheme particularly supported households in areas that are not connected to the gas grid, and support was doubled to £200 in the autumn statement to reflect the price rises experienced by people using alternative fuels to heat their home.

Only last week, my Department published figures showing that over £24 million had been spent on EBSS and AFP support in Glasgow Central, where the district of Dalmarnock is located. That is just two schemes and does not include the significant support provided through the EPG. In total, the Government spent around £1.2 billion to support households in Scotland.

The Government have welcomed recent reductions in household energy bills. The energy price cap for quarter 4 of this year has been set at £1,834, which is significantly down from the £4,279 at the start of the year. The energy price guarantee will remain in place until March 2024, providing a safety net for consumers should energy prices spike unexpectedly by limiting the amount that suppliers can charge per unit of gas or electricity.

Additional support has been delivered through the welfare system for the most vulnerable households, with eligible households receiving a £900 cost of living payment during 2023-24. This is an increase from the £650 such households received the previous year. The Government will continue to provide targeted support for the most vulnerable, with 3 million households across Great Britain expected to benefit from the £150 warm home discount this winter. Eligible households will also receive the winter fuel payment, worth between £250 and £600, and the cold weather payment that provides £25 during very cold weather.

As I am sure the hon. Lady knows, fuel poverty is a devolved policy. We have responsibility for England, but it is right that we note the work that the Scottish Government are doing in this space and the lessons learned. Multiple schemes have been set up, including the winter heating payment, the home heating support fund and the child winter heating assistance scheme, to help reduce fuel poverty specifically in Scotland. As set out in the autumn statement, we are exploring the best approach to consumer protection as part of wider retail market reforms.

We welcome Ofgem’s new rules for energy suppliers, which will ensure that all energy customers get the good service they deserve. Suppliers will now be required to prioritise vulnerable customers when they request help, offer timely repayment plans for those struggling with bills, and make customer ratings easy to find on their websites.

In the longer term, improving energy efficiency will be key to tackling fuel poverty, contributing to the long-term reduction of energy bills, and reaching net zero. In addition to the £6.6 billion allocated in this Parliament, £6 billion of new funding will be made available from 2025 to 2028.

The Government have also extended the energy company obligation—ECO—from 2022 to 2026 and expanded it to a total of £4 billion to accelerate efforts to improve homes and meet fuel poverty targets, and £1 billion has been committed through the Great British insulation scheme, which will improve more than 300,000 of Great Britain’s least energy-efficient homes.

The Government’s vision for the energy retail market is one that works better for consumers, is more resilient and investable, and supports the transformation of our energy system. Much remains to be done to deliver our vision. That is why we are pursuing further targeted reforms, which will set us on a path to unlocking competition, investment and innovation, and helping the energy market to achieve net zero while protecting the most vulnerable.

The hon. Member mentioned talking to suppliers. I assure her that I talk to suppliers and other stakeholders, such as Citizens Advice, on an ongoing basis. It is important to have those conversations.

We are also looking to provide protection to those using heat networks, including people in Dalmarnock. Subject to the passage of the Energy Bill, heat network customers in Scotland will be protected by UK-wide consumer protection legislation, as well as the regulatory framework established by the Heat Networks (Scotland) Act 2021.

The Government will closely monitor energy prices and keep energy support schemes under review, as well as provide longer-term support to keep energy bills more affordable for all. One of the schemes that we are considering is the “It All Adds Up” campaign, which I encourage the hon. Member to support. We are trying to encourage households to look at where they can make further savings.

I am planning to visit Scotland in the near future, and I welcome the opportunity to engage more closely on this issue.

I sincerely thank the hon. Member for introducing this important debate and for all her efforts to ensure that her constituents are fully supported.

Question put and agreed to.