Warm Home Discount (Miscellaneous Amendments) Regulations 2021

Baroness McIntosh of Pickering Excerpts

Tuesday 18th May 2021 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to speak in support of the regulations before us and thank my noble friend for setting them out so clearly. I have a number of technical questions and, as I have not been able to give advance notice, if my noble friend cannot reply in full, I would very much welcome a written response, if that is in order.

I particularly welcome the Government’s commitment to ending fuel poverty and declare my interest as president of National Energy Action. I pay tribute to NEA, which works across England, Wales and Northern Ireland to ensure that everyone in the UK can afford to live in a warm, safe home. NEA both promotes the warm home discount rebate scheme to its clients, ensuring that those who are most in need can access it, and delivers broader support as part of the industry initiative portion of the warm home discount. My noble friend has accurately set out why this scheme is so important, and I echo that NEA strongly supports passing these regulations exactly as they are set out before us.

I will take this opportunity to look at some of the detail beyond the welcome single-year extension. NEA hopes that the regulations will take effect as soon as possible—the scheme effectively came into force on 1 April 2021; I think my noble friend will confirm this—and I echo its concern that the new regulations are urgently required to give immediate clarity to vulnerable energy consumers and industry participants on the shape of this scheme year.

I also welcome the commitments made in the energy White Paper, which has pledged to extend and expand the warm home discount scheme, after the one-year extension, from April 2022 to the end of March 2026 with an expanded scheme envelope. I hope that this debate enables us to look at the opportunities that these future developments will provide, and I take this opportunity to seek early clarity on the longer-term scheme.

It is particularly welcome that, while the White Paper does not set out too much detail, it makes a number of commitments that are to be noted and welcomed. These are a significant increase in the scheme envelope to £475 million a year from the current £350 million a year, and an increase in the rebate from £140 to £150. I also welcome consulting on reforms to improve fuel poverty targeting; for example, using government data to provide automatic rebates to most recipients.

There are some concerns expressed by NEA about the detail, which I hope can be resolved at the earliest opportunity, certainly before the end of this one-year extension and forthcoming consultation. The only clarity over the future of the industry initiative portion of the scheme was a commitment from the Minister in the corresponding debate to today when these regulations were raised in the Commons:

“The reform consultations later this year will include industry initiatives.”—[Official Report, Commons, 27/4/21; col. 315.]


Industry initiatives are particularly important to deliver significant value for the most vulnerable households. It is argued that they must be retained for the current level of energy advice, income advice and fuel vouchers to be preserved. Therefore, I hope that, as part of this debate, my noble friend is able to confirm and agree that the industry initiative scheme is of significant value and that, as far as the Government are concerned, this vital element will continue or be further expanded.

I want to raise on behalf of National Energy Action its concern about the intention to improve fuel poverty targeting. In the impact assessment for the recent consultation on the one-year extension of the scheme before us today, BEIS set out the fuel poverty hit rate for the current core group and the broader group based on the England-only fuel poverty “low income high costs” definition, which has been recently adjusted. While it is important that the poorest fuel-poor households can access future warm home discount rebates, this analysis implies the possibility of withdrawing support from the current core group and the broader group recipients. If that is the case, it could prove detrimental to households that currently receive the rebate, in particular current core group pensioner recipients or low-income-household recipients who require support with their energy bills via the broader group but who do not fall within the new fuel poverty metric for England: those with income less than 60% of the median living in poverty with an EPC of D, E, F or G.

Taking rebates away from the core group would remove support from the poorest pensioners, which I am sure is not the Government’s intention. Whether captured within the England-only fuel poverty metric or not, poorer recipients within the broader group could also face significant health risks when living in cold homes. The current discount doubtless helps mitigate such risks. I therefore request on behalf of NEA that the Minister share with us how these potential risks will be mitigated and how the department expects to do so.

While it is important that we value the contribution that the warm home discount scheme makes in supporting the Government’s wider fuel poverty commitments, the NEA specifically does not support one-off energy rebates counting towards progress to meet statutory energy-efficient fuel poverty targets. The current approach considers whether a household receives the warm home discount and, if so, treats the rebate as an energy-saving measure. This means that the energy-efficient fuel poverty target can be reached in part through giving rebates to households. As rebates do not necessarily deliver the same lasting benefits as energy-efficiency improvements, NEA believes it important that the warm home discount scheme does not potentially mask a lack of progress in increasing levels of domestic energy efficiency in fuel-poor homes.

While we accept and welcome the safe passage of a one-year extension, which will be secured through the regulations before us today, these issues should be addressed to ensure the future of the scheme. I welcome the regulations. I congratulate the Government on their ambitions, and hope that my concerns will be heard.