Oral Answers to Questions
Martin McCluskey Excerpts(2 weeks, 6 days ago)
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John Milne (Horsham) (LD)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
The hon. Gentleman will know that tackling the cost of living is this Government’s priority. We have already taken action at the Budget, and we have also expanded the warm home discount to nearly 6 million households. We are working closely with other Departments on our kickstarter programme to test how public sector data could be better joined up to target support at those who need it most.
John Milne
The Liberal Democrat essential energy plan is an immediate way to address electricity affordability, but in the long term the solution must lie in more renewables, as I think the Secretary of State agrees. However, the Government’s failure to make the case effectively is now becoming a serious problem in itself. Does the Minister accept that promising to cut energy bills by £300 was a mistake, when the price was bound to be affected by many other factors, and does he also accept that another manifesto pledge, Great British Energy, is currently just a logo in search of a purpose?
Martin McCluskey
I am disappointed at the hon. Gentleman’s statement. We are making the case strongly and our pledge to reduce energy bills still stands. He will know that renewables are the quickest way to reduce our energy bills. He will also know that the warm home discount is providing significant support to people in his constituency right now. Just this year, the number of people in his constituency receiving the warm home discount has more than doubled to over 5,000.
Jonathan Davies (Mid Derbyshire) (Lab)
The warm home discount is a great initiative to help households cut their bills, but one thing we could expand to do more in this space is our heat network programme, and we may be getting a heat network in Derby. However, there is often a lack of awareness, particularly in some public sector organisations and businesses, of the opportunities that heat networks offer. It may be that winding down the public sector decarbonisation scheme is not enabling as many as we would like to sign up. Could I ask the Minister to look at our engagement with business, the public sector and housing providers to make sure that as many people as possible can benefit from heat networks?
Martin McCluskey
My hon. Friend makes a really important point. If we are to reach our clean power targets, we need heat networks on the system to be providing significant levels of clean heat. He will know that the green heat network fund is already providing significant support across the country, and we will of course look at what more we can do to support heat networks over the coming years.
Rachael Maskell (York Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I know the recent rise in energy bills will be very concerning for families across the country. At the last Budget, we took an average of £150 off energy bills, which is now factored into our bills for years to come, and we have also expanded the warm home discount.
Rachael Maskell
I thank the Minister for his answer. Preparedness for the sharp increase in domestic energy costs is vital, with 13.5 million homes expected to be paying more than 10% of their household’s spending on energy this winter and 5.5 million homes more than 20%, leaving families at breaking point. What further steps is he intending to make to expand the warm home discount scheme, to take levies off electricity bills to cut costs, and to expand social tariffs?
Martin McCluskey
We are preparing for every contingency and looking at the support that may be required in the autumn and winter. The significant increase in the warm home discount has obviously benefited households right across the country, not least in my hon. Friend’s constituency. The number receiving the warm home discount in York Central has increased from nearly 2,500 to over 8,000, to a value of £1.2 million in support offered to her constituents.
Carla Lockhart (Upper Bann) (DUP)
Last year, a Government-funded agency approved more than £50 million of taxpayers’ money for solar geoengineering projects, one of which endeavours to dim the sun. At a time when families are struggling with energy costs and domestic production is being constrained, why are Ministers backing speculative climate manipulation, instead of fully using North sea oil and gas to deliver affordable, stronger and more secure energy, and lower bills?
Martin McCluskey
This is nonsense. That was set up by an arm’s length organisation set up by the previous Government. It is not something that the Government are funding. In so far as that refers to more affordable energy, we are obviously working at pace to make sure energy is affordable right across the United Kingdom, including whatever support we can offer in Northern Ireland.
Joe Morris (Hexham) (Lab)
Mr Alex Barros-Curtis (Cardiff West) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I commend my hon. Friend and his constituents for their enthusiasm for the warm homes plan. They can already access grants through the warm homes plan, and they will soon be able to receive loans.
Mr Gregory Campbell (East Londonderry) (DUP)
Yuan Yang (Earley and Woodley) (Lab)
Putin’s war in Ukraine and Trump’s war in Iran have shown us the need to make Britain more resilient against global energy shocks. Can my hon. Friend set out what the Government are doing to ensure that domestic electricity prices are decoupled from global gas prices, so that my constituents can get the best out of cheap, green, local renewables?
Martin McCluskey
I pay tribute to the work my hon. Friend is doing for her constituents on this issue. The most effective way to decouple our electricity prices from gas is to expand our renewable generation. Every wind turbine we turn on and every solar panel that we deploy helps to push gas off as the price-setter. We will continue to work in this way.
Harriet Cross (Gordon and Buchan) (Con)
Just this year, Norway has opened up a licensing round for 70 new oil and gas blocks. It is reopening three old gas fields and has permitted development plans for three new fields. Meanwhile, this Government are still banning licences, taxing the industry out of business and not permitting Rosebank and Jackdaw. Why does the Secretary of State think he is right and our Norwegian friends are wrong?
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
On heating oil, the Scottish National party Government boasted that they would add £5.4 million to the £4.6 million the UK Government gave to domestic consumers. However, there is scant evidence that that is reaching my constituents in the Western Isles, which have the highest fuel poverty figures in the country. Will the Minister join me in encouraging constituents to apply for support? Will he ask the Scottish Government to broaden the criteria and Advice Direct Scotland to get that money out the door, so that people are not left high and dry?
Martin McCluskey
My hon. Friend is right that more people need to claim the support that is on offer, and I encourage them to do that in his constituency and across Scotland. My understanding is that just over £1 million of the £10 million in the fund has been distributed.
Perran Moon (Camborne and Redruth) (Lab)
South Crofty in my Camborne, Redruth and Hayle constituency is approaching the historic restoration of Cornish tin mining, but high energy costs risk the UK losing control of the supply chain in domestic processing and refining. If the Government are serious about building up a sovereign critical minerals supply chain, will the Minister meet me to discuss extending BICS and the industrial supercharger scheme to critical minerals?
Vikki Slade (Mid Dorset and North Poole) (LD)
The Government have worked with Ofgem to bring forward low or no standing charge schemes, which are supposedly open for trial. I cannot find them and neither can my residents. The access to those schemes is so small, so what are the Government doing to make them available to more people now?
Martin McCluskey
I will share details of that with the hon. Lady. We are also undertaking the cost allocation review, which deals with those issues.
Sonia Kumar (Dudley) (Lab)
The UK’s green economy is worth more than £100 billion a year, and nearly half a trillion pounds in investment is in the pipeline. What steps is the Minister taking to ensure that the contracts that his Department provides prioritise British firms and British jobs, so that we can prove our national capabilities and secure our energy?
Non-domestic Minimum Energy Efficiency Standards
Martin McCluskey Excerpts(1 month, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I am pleased to provide an update on the Government’s approach to strengthening minimum energy efficiency standards in the non domestic private rented sector, following our previous consultations and extensive recent engagement with industry, investors, local authorities and other stakeholders.
The Government consulted in 2019 and 2021 on proposals to raise non-domestic PRS MEES to EPC B, reflecting the role of energy efficiency in cutting bills, strengthening energy security and supporting the transition to net zero. Since then, we have continued to engage closely with stakeholders on how these proposals would work in practice across a diverse commercial building stock.
Listening carefully to that feedback, the Government have now confirmed their intention to implement a revised and proportionate approach that maintains ambition where it delivers the greatest benefits, while providing greater flexibility for smaller businesses and landlords.
In practice, this means that from 2031 it is proposed that private rented non-domestic buildings over 1,000 square metres in England and Wales will be required to meet a higher energy efficiency standard of EPC B, where cost-effective. This offers a more targeted approach compared with the original proposal, which would have applied across the entire non-domestic building stock. Initial modelling suggests that raising the standard for the largest premises could save those tenants £360 million per year on their energy costs by 2031.
The intention is for buildings below 1,000 square metres to continue to be subject to the current EPC E minimum standard.
The previously consulted interim EPC C milestone for 2027 will not be taken forward, giving landlords and tenants more time to plan investment and retrofit works in a way that suits their buildings and lease structures.
Existing flexibility mechanisms, including the seven-year payback test and exemptions, will remain in place, ensuring that only improvements that are practical, affordable and cost-effective will be required.
The changes to raise MEES to EPC B for larger buildings will take effect following the successful passage of secondary legislation through Parliament.
This targeted approach focuses action where it delivers the greatest benefits, helping tenants in the largest buildings to save energy and reduce bills, protecting them from future energy shocks. While continuing to improve the poorest performing buildings through the existing EPC E standard, we are giving additional flexibility to our SMEs and high streets to upgrade their buildings over time, with no set deadline for going beyond this level. With a fair and proportionate timetable, the policy supports business investment, reduces exposure to volatile energy prices and strengthens UK energy security.
We will publish the Government’s consultation response in due course, setting out further detail on the policy and implementation of the threshold, and aim to introduce legislation and supporting guidance at the earliest opportunity.
We will continue to work closely with industry and other stakeholders to ensure that the pathway to EPC B is fair, clear and deliverable.
We look forward to continuing the dialogue with industry as we move into the next phase of delivery.
[HCWS126]
Energy Market: Consumer Protection
Martin McCluskey Excerpts(1 month, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
We are acting today to restore consumer confidence in the energy sector and ensure that failures in Government insulation schemes can never happen again.
The 2025 National Audit Office report into the failures of the ECO scheme gave a damning account of the failures of the ECO4 and GBIS schemes that we inherited from the previous Government: thousands of faulty installations, terrible damage to peoples’ properties, and blameless families who had signed up to a Government scheme and were forced to live in damp and sometimes unsafe conditions as a consequence.
I promised, when I first updated the House on our response, that it would never happen again.
As we embark on the Government’s warm homes plan—the biggest programme of home upgrades in British history—we must ensure that people have confidence when retrofitting and upgrading their homes.
Homeowners and landlords need to trust that upgrading their buildings will deliver the right results and not leave them facing further issues down the line. Those faulty installations did not just damage people’s properties, they eroded trust and confidence in the entire market. In October, we set out three principles for reform of consumer protection that have guided our proposals:
Work should be right first time. Despite the unacceptable failures uncovered in ECO4 and GBIS, in most cases work on Government schemes is safe and carried out to a high standard. Consumers must be able to trust that work will be done right the first time in all but the rarest circumstances.
Simplicity. People should not be expected to navigate a variety of organisations when they want to make changes to improve their homes. The installation process for low-carbon heating and energy-efficient home upgrades will be clear and straightforward.
Swift remediation and a straightforward process for redress. In those rare cases where things do go wrong, there must be clear lines of accountability, so that consumers are guaranteed to get any problems fixed quickly
We are taking this chance to completely overhaul the consumer protection landscape and fundamentally reset a system that simply has not worked for people across the country.
Today we are launching a consultation on consumer protection, seeking views on how we can simplify the current fragmented landscape and establish a single, accessible, end-to-end consumer protection service for home upgrades, that means stronger central oversight, shifting the system towards prevention, and clearer lines of accountability across Government and industry.
This will have powers to enforce better service through contracts that hold installers and delivery partners to account, including bans from working on Government schemes if they do not meet high standards.
This will protect people in the future, but we must also support people who had faulty solid wall insulation fitted during ECO4 and GBIS. We are doing that in three ways.
First, at the end of last year we launched our “Find and Fix” programme to identify and offer a full house audit to the families who had external wall insulation installed under ECO4 and GBIS.
We have now contacted over 10,000 properties and arranged over 5,000 audits.
And we want to help all affected households to access an audit as quickly as possible. TrustMark will continue to contact households, and I would encourage everyone who hears from them to take up the offer of a free audit.
I have been clear that the families who have suffered from these poor installations should not be the ones to pick up the bill. It is the industry’s responsibility to put this right and help affected families.
Secondly, in cases where the installer that fitted the faulty installation is no longer trading and the guarantee is missing, fraudulent or cancelled, the National Energy Foundation will be contacting homeowners and arranging remediation of both internal and external wall insulation fitted under ECO4 and GBIS.
Eligible homes will be identified through audits, with remediation action in recipient homes taking place as quickly as they can make that happen.
Thirdly, in the rare instances where the cost of damage from faulty ECO4 and GBIS solid wall insulations exceeds the £20,000 limit covered by a valid guarantee, we are working with delivery partners on the right solutions.
I can announce today that the Installation Assurance Authority will now cover the cost of repairs up to £25,000 where these are within the terms of the original, still-valid IAA guarantee. We will continue to work on solutions for the remaining cases, and I hope that other guarantee providers will follow the IAA’s lead.
Families who were affected should first contact the installer who carried out the installation, and where the installer is no longer trading or unable to remedy damages, they can contact their guarantee provider to initiate a claim.
ECO4 and GBIS has some of the highest levels of non-compliance that Government have seen, but other issues have been brought to the Department’s attention. In particular, many households who had spray foam installed have found they have encountered problems when selling their home. I have held extensive talks with the spray foam industry to support homeowners that have struggled to sell or been targeted by rogue removal companies. Independent advice has been published online by the Property Care Association, and we will keep working with mortgage lenders to ensure they can be flexible when lending to those affected.
A range of major lenders are already on side and have confirmed that they will not take a blanket approach to houses with spray foam, including Nationwide, Lloyds, Santander and Barclays, and I am planning a follow-up roundtable with the sector later this summer.
Finally, ensuring a fair deal for consumers in the energy market remains a priority for the Government. Today we are also responding to our consultation on strengthening protections in the energy supply market, enhancing the powers of the Energy Ombudsman and making it easier for consumers to access support when they have a complaint about their retail supplier. We want to give the ombudsman stronger powers, including the ability to issue a penalty fee that will end up as compensation for consumers, to enforce decisions and hold suppliers to account.
Families will have clearer routes to pursue justice through the courts, and we are shortening the complaints process and making automatic referral to the ombudsman easier so that people are no longer stuck in limbo waiting for their case to be escalated.
If we want to change this country, restore faith in Government’s ability to improve lives and disrupt a status quo that is simply not good enough for so many people, then we need to learn from the mistakes of the past.
We need to rebuild confidence and take people with us, and we need to ensure that failures like those we saw on the ECO4 and GBIS schemes can never happen again.
This is our chance to build an energy sector that truly works for working people, and that is the message behind the measures I have set out today.
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Plug-in Solar: Consultation
Martin McCluskey Excerpts(1 month, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
Today I am announcing the publication of a consultation on proposals to enable the safe deployment of plug-in solar across the United Kingdom.
Plug-in solar brings the benefits of clean power directly to consumers across the country. Enabling more households than ever before to generate their own cheap, clean electricity from the sun could save households up to £110 per annum. Plug-in solar is already widely used by households across Europe, with Germany seeing around half a million new devices plugged in per year. However, existing regulatory frameworks were not designed with these technologies in mind. We are changing this, with safety at the forefront of our minds.
This consultation seeks views on proposed amendments to the Plugs and Sockets etc. (Safety) Regulations 1994 and a draft UK plug-in solar interim product specification, both of which will facilitate the introduction of plug-in solar products in a safe and proportionate way. The draft product specification has been drawn from established approaches in Germany, where plug-in solar is already widely deployed, demonstrating that these systems can be used safely when appropriate standards are in place, and adapted to ensure it reflects UK regulatory requirements, building practices and safety expectations.
The interim standard, together with the development of a long-term product standard, which we are developing in parallel, will ensure that plug-in solar is safely available and ensures a seamless transition while a full product standard is developed and fully consulted on.
We are seeking evidence on key issues including minimum product specification, consumer protection and market issues and implementation and timing. This will ensure that any regulatory changes are informed by a robust evidence base and reflect the views of industry, consumer groups, and other interested parties.
In the context of recent developments in Iran and wider energy pressures, we are making every effort to accelerate deployment of plug-in solar, ensuring that where it is safe and appropriate to do so products can reach the market and retail as quickly as possible.
The Government are committed to the development of a well-functioning and safe market. We will carry out targeted engagement and expert workshops while the consultation is running.
I am committed to making plug-in solar available within months, giving consumers a practical option to increase their energy independence, reduce their energy bills and benefit from this country’s vast clean power resources.
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Clean Power by 2030
Martin McCluskey Excerpts(1 month, 2 weeks ago)
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Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
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Energy Costs
Martin McCluskey Excerpts(1 month, 2 weeks ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
It is a pleasure to serve under your chairmanship, Ms McVey. I am grateful to the hon. Member for Gorton and Denton (Hannah Spencer) for securing the debate, and I congratulate her on her first Westminster Hall debate and on giving hon. Members across the Chamber the opportunity to discuss a vital issue for all our constituents.
As I draw the debate to a close, I want to be very clear about this Government’s priorities. The increase in the price cap announced by Ofgem two weeks ago is not what any of us wanted, and it is caused by the war in Iran. Two days before the conflict began, the price cap fell by 7%—a reduction that is still built into the prices being paid today. As the Prime Minister has said, this is not our war, but we are now feeling the effects of it. That is why we are very clear that the strait of Hormuz must be reopened to traffic.
Richard Burgon
Is it not totally outrageous that energy giants will make billions in extra profits from Trump’s war on Iran while ordinary people are hit with higher costs? Does the Minister agree that we should introduce an emergency war profits tax to ensure that they cannot make a single extra penny in super-profits from this crisis? We can use that money to fund urgent cost of living support.
Martin McCluskey
My hon. Friend will know that decisions about tax are for the Chancellor. We already have the windfall tax on energy profits in place—a tax opposed by the SNP and the Conservative Opposition.
I will turn to the points raised by the hon. Member for Gorton and Denton and my hon. Friend the Member for Leeds East (Richard Burgon) in a moment. As I was saying, it is not our war, but we are now feeling the effects, and that is why we are very clear that the strait of Hormuz must be reopened to traffic. As Members across the Chamber would expect, we are continuing to monitor the situation. We are exploring all options for future support, but we are taking action now to deal with high prices.
Let us be clear why we are doing that: we know that the pressure of high energy costs is very real for many families across the country, as the hon. Member for Gorton and Denton described. Households continue to feel the burden of bills, particularly where incomes are tight, and there is little room in their budgets for unexpected costs. We are determined to return bills to the downward path they were on before the outbreak of the war. It is important to note that energy prices in 2025 were lower than they were in 2024. We delivered a 7% reduction in energy prices in February. They were on a downward trajectory before the outbreak of war in Iran. We are doing this to tackle fuel poverty and protect people from the rollercoaster of fossil fuel markets that has left too many families exposed to volatile energy prices for too long.
Susan Murray
It is good to hear the Government’s intention to reduce energy prices. The hon. Member for Gorton and Denton (Hannah Spencer) is right to call for more affordable energy. In France, electricity is about a third cheaper than it is here, with nuclear at the heart of the system. Does the Minister agree that ruling nuclear out or not progressing it quickly enough is wrong, and will he join me in calling for the assessment of Scotland’s nuclear potential to be published?
Martin McCluskey
I join the hon. Lady in those calls on nuclear energy, which is essential to our energy mix. She highlighted the example of France; one reason why its electricity cost is so low is that it carried on building nuclear through the ’50s, ’60s, ’70s and ’80s. Unlike this country, where we had a stop-start approach to nuclear energy, France has been able to keep costs low. It is disappointing that we have seen opposition to nuclear from the SNP, which will not allow it to be built in Scotland, and from the Green party, which has opposed it, including at Wylfa in north Wales, where we are creating a whole generation of new jobs around nuclear. More than 1,900 Scots move from Scotland to England each week to work on nuclear projects—people who could be working far closer to home if there was a new generation of nuclear energy in Scotland.
Turning back to the action the Government have already taken, in the autumn Budget we acted to reduce electricity costs, to the benefit of all households with a domestic electricity meter. We did that by scrapping the energy company obligation and moving 75% of the domestic costs of the renewables obligation to the Exchequer. By doing that, we have been able to provide immediate savings for households.
The average saving was around £117 within the price cap, but because it disproportionately fell on electricity—I know that the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) is interested in the cost of electricity, particularly in rural areas—the discount for rural areas and those on electricity was well over £300 within the price cap. As I said earlier, those changes are still factored into energy bills now; without that action, the July price cap would have been significantly higher.
We also announced the continuation of the warm home discount scheme until 2030-31. That will provide around 6 million eligible households with a £150 rebate on energy bills each winter; it is a significant extension of what was available under the previous Government, and it has reached far more people in the last year than it did in the past.
The main, structural reason why we find our energy bills so high is because of our exposure, in this country, to volatile international gas markets. The only answer to dealing with those high prices is to take back control of our energy through clean, home-grown power and homes that are cheaper to run. That approach is supported by our warm homes plan. The hon. Member for Gorton and Denton alluded to the need for more retrofitting and improvements to be made to housing, and that is what we are doing through the warm homes plan, which represents the biggest public investment in home upgrades in British history.
Tim Roca (Macclesfield) (Lab)
The Minister is making a powerful point about the investments that the Government are making in green and clean energy. In Macclesfield, families are suffering from high energy costs at the pumps or in making sure that their homes are warm when they need to be. Does he agree that tackling climate change, investing in clean energy and bringing down bills come together as a coherent argument, and that we should all be making the case for that?
Martin McCluskey
My hon. Friend is a champion for his constituents. He is making the argument not just for lower prices at the pump and lower costs of energy, but for doing that in a clean, green way. Those two things do go hand in hand; we can reduce energy and fuel prices while people can also make important decisions about clean energy in their own lives. That is exactly what the Government are doing.
As I was saying, the approach that we are taking is supported by our warm homes plan, which represents the biggest public investment in home upgrades in British history. It is backed by £15 billion and will help upgrade up to 5 million homes by 2030; that means real improvements to the homes people live in.
Households will benefit from solar panels, clean heat technologies and batteries, and improved insulation. Insulation is an essential part of what we are trying to do in the warm homes plan; it has always been part of Government schemes and will into the future. All that is to cut bills and improve comfort for homeowners, renters and others. It will mean a housing stock that is better prepared for the future and a country that is less vulnerable to energy price shocks.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
We are waiting for the Department for Energy Security and Net Zero to come up with the results of the community benefit consultation. The highlands only got £9 million of community benefit last year, and Scotland as a whole got less than £30 million. There are tens of thousands of jobs in renewables in the highlands, but they are not for locals; they are imported teams. Very often, offshore firms are doing the construction. We sell 10 times more electricity than we produce. Effectively, there is nothing in it for the people of rural Scotland to produce electricity. Does the Minister agree that the community benefit conclusion from DESNZ is crucial?
Martin McCluskey
The hon. Member makes a powerful point. We will come forward with the response on community benefits soon. I point him towards what we have already announced regarding a trial of free wind power for communities close to generation, which will be coming later this year. His point about workforce is also really important. That is why I am chairing a workforce taskforce with the TUC to work through those points and make sure that we have good, home-grown jobs that are unionised and pay decent wages, and that local communities are feeling the benefit of that.
Mike Reader (Northampton South) (Lab)
The hon. Member for Gorton and Denton (Hannah Spencer) referred to retrofitting in her speech, and the Minister has talked about its importance. In Northampton, one of the biggest concerns people have about committing to retrofit is getting a dodgy builder. The Energy Security and Net Zero Committee recognise that, and we have recommended to Government that they bring forward a licensing scheme for contractors and an accreditation scheme for tradespeople. Could the Minister set out how the Government are progressing on that?
Martin McCluskey
My hon. Friend makes a really important point. We are coming forward soon with our proposals for consumer protection. I have said before in this Chamber that the first thing that landed on my desk, when I came into this role in September, was the NAO’s report into the previous Government’s energy company obligation scheme, which was shocking—awful. To answer the point raised by the hon. Member for Gorton and Denton, my driving force behind any consumer protection work that we do is to make sure that no one faces such a situation ever again.
We are working with those affected by the problems with solid wall insulation and internal wall insulation. We are working through a process of audits to reach every single one of those homes by next year and make sure that those people get the support they need. The hon. Lady mentioned that in her remarks, and we are taking action on SWI and IWI to reach every household. In some of the hot spots for poor work, we are sending people door to door to make sure that we reach each household, audit the properties, work out what remediation is required and then remediate it. We will be able to provide a more detailed update on that work soon. Those actions and others will lift 1 million households out of fuel poverty by 2030.
The warm homes plan is an offer for everyone. For those on low incomes and in fuel poverty—those who need it most—we are providing £5 billion of direct grant support for home upgrades delivered by local authorities and social housing providers. Given where the hon. Lady’s constituency is, I pay tribute to the work that the Greater Manchester combined authority has been doing through the warm homes social housing fund and the warm homes local grant—it is leading the way in some of the work that is being done.
We are making it easier for everyone to access low and zero-interest finance for technologies that can bring bills down over time. We have a strategic partnership with the Green Finance Institute to establish low-cost loans, ideally before the end of this year, to make sure that people have access to finance and can take advantage of clean technology; we cannot have a situation, as we have had in the past, where only those people with the deepest pockets are able to access these cost-saving measures.
We are, of course, continuing to support the expanded boiler upgrade scheme available to every eligible household in England and Wales. We have also broadened the range of clean heat technologies supported by the boiler upgrade scheme and continue to work with the industry to make clean heat and home energy upgrades simpler.
As the situation in Iran has developed over the past few months, we have seen that households want the chance to generate and use their own clean electricity. That is why the Government are supporting a rooftop revolution to bring solar technology into more homes; hon. Members may have seen the increase in solar over recent months. Subject to final approvals, we are bringing an additional £100 million of funding to the warm homes social housing fund, to support the delivery of up to 57,000 solar installations in this financial year. Our plan is to make plug-in solar available in this country for the first time, opening opportunities for homes where traditional rooftop installation is harder.
We also know that, in too many cases, the people paying the price of inefficient homes are the people with the least power to change them. Around 1.6 million children in this country live in cold and damp conditions in private rented accommodation, which is frankly a disgrace. That is why, as part of the warm homes plan, we are introducing new minimum energy efficiency standards in the social and private rental sectors. Alongside what other parts of Government are doing on wider housing reforms, such as the Renters’ Rights Act 2025, they will make sure that renters can benefit from warmer homes and lower bills, and that energy affordability is not reserved just for owner-occupiers.
Before I conclude, I want to turn to a couple of other points. The hon. Member for Gorton and Denton raised some issues around taxation. I have already mentioned in response to other Members the windfall tax, which remains in place, opposed by the Conservatives and the SNP. We have also recently announced increases to the energy generators levy and the encouragement to take those generators from the contracts they are on at the moment on to longer-term contracts for difference. Within the price cap is a cap on profit; the earnings before interest and taxes allowance caps profit at 1.9% and ensures that profit is there, but adequately capped.
I agree with the hon. Lady that we need to be going further and faster on the deployment of clean energy, but I draw her attention to the actions of some of her colleagues in local authorities across the country, where Green councillors have opposed clean energy that, on the latest estimate, could power 9.9 million homes. If we believe in clean power and this agenda, we must place our political will behind it to make sure that we move away from fossil fuels as quickly as possible.
The Government’s message here is straightforward: we are acting to deliver support directly to those who need it most. We have a serious, long-term plan to reduce exposure to fossil fuel price shocks, improve the homes people live in and ensure that everyone can reap the benefits of this Government’s clean power mission. Our approach is practical, fair and, above all, rooted in the everyday concerns of households. I thank hon. Members for their contributions to this debate.
Question put and agreed to.
Draft Energy Prices Act 2022 (Amendment) (Northern Ireland) Regulations 2026
Martin McCluskey Excerpts(1 month, 3 weeks ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move,
That the Committee has considered the draft Energy Prices Act 2022 (Amendment) (Northern Ireland) Regulations 2026.
It is a pleasure to serve under your chairmanship, Sir Alec. The draft regulations were laid before the House on 16 March.
This Government are fully committed to fighting people’s corner to tackle the cost of living crisis across the United Kingdom. We are taking action on the matter as a priority and we are supporting devolved Governments to act when that is within their purview. I work closely with Ministers in the devolved Governments, including the Northern Ireland Executive. That covers work on the Budget commitments we are discussing, and more widely on the situation for energy consumers across the UK.
At last year’s Budget, alongside several positive changes to help working people across the country with the cost of living, the Chancellor announced significant changes to the cost of energy for households. Let me first set out the implications of those changes for consumers in Northern Ireland, before I turn specifically to the draft regulations.
The Budget set out that we would remove certain costs from energy bills in Great Britain, which led to energy bills in GB falling by 7% from 1 April this year. That reduced costs on bills related to the renewables obligation and the energy company obligation. Northern Ireland is in a different position as part of the single electricity market across the island of Ireland. Energy affordability is largely a transferred matter for the Northern Ireland Executive. From the outset of the Budget, however, we were clear that we would support the Executive to develop a comparable offer and that, subject to a business case, the Treasury would make such funds available.
The Northern Ireland Department for the Economy has since developed a proposal to remove costs—about £30 a year—from electricity bills, totalling £81 million of support over three years. That figure arises because in Northern Ireland, the starting point of policy costs on those bills is different from in Great Britain. In official-level discussions in the wake of the Budget, my Department and the Northern Ireland Department for the Economy worked closely to share learning about the policy design and its legislative basis. That joint working has supported the Northern Ireland Department’s development of its parallel policy.
On 2 March, the Minister for the Economy in Northern Ireland, Dr Caoimhe Archibald, wrote to me to ask that we take forward regulations to support delivery. We laid the draft regulations before Parliament a fortnight after receipt of that letter, and we are discussing them today. Although we are making the regulations to ensure that the Northern Ireland Department for the Economy has the powers it needs, I should be clear that it is entirely for the Northern Ireland Department to exercise those powers, and for the Executive to announce further details on the policy that they are taking forward.
Let me briefly set out precisely what the draft regulations do. They do not give the Northern Ireland Department any new powers that it did not already have in March; they amend the period in which various Energy Prices Act 2022 powers are available to the Northern Ireland Department. Those include a spending power and a direction-making power analogous to those we have used to deliver reduced costs on bills in GB. The effect of the amended time periods is that those powers will now be due to expire in February 2030. They should therefore be available to the NI Department for the duration of the transfer of the renewables obligation cost to the Exchequer.
Jim Allister (North Antrim) (TUV)
Apart from the fact that, because we are in effect under the EU-controlled single electricity market, our prices are so much higher than those in GB, I am particularly intrigued to understand the thinking behind a point made in the explanatory notes. It indicates that the extensions apply only so long as the First Minister and Deputy First Minister are in office. What is the correlation and why is that correlation there?
Martin McCluskey
That was part of the Energy Prices Act, as passed into primary legislation in 2022. It was intended to ensure that the powers were functioning at the time when the Executive were formed. I will go into more detail later.
As I was saying, the EPA powers available to the Northern Ireland Department include a spending power and a direction-making power analogous to those that we have used to deliver reduced costs of bills in GB. Those powers will now be due to expire in February 2030. I do not expect my Department to need to take further legislative steps in relation to policy in Northern Ireland, with the Executive now taking on its implementation.
Before I close, I repeat what I said when discussing the parallel regulations on the Secretary of State’s power: this is being taken forward in an international environment that is different from the one in which last year’s Budget took place. That difference reinforces the importance of what we are doing, but we also recognise that further steps may be needed. We have set out what we are doing in relation to heating oil, and contingency planning is under way in case further responsive and responsible action is required.
Ultimately, the draft regulations amend the period in which powers will be available to the Northern Ireland Department for the Economy, following a request from that Department to ensure that it can act as it needs to in order to reduce energy bills. I commend the draft regulations to the Committee.
Martin McCluskey
Let me first turn to the point that has been raised by the hon. and learned Member for North Antrim and the hon. Member for West Aberdeenshire and Kincardine. As I understand it—we were obviously not in government in this period; the party of the hon. Member for West Aberdeenshire and Kincardine was—during the passage of the 2022 Act, that section was formulated in such a way in order for the powers to be implemented once the Executive were formed. It does not mean that if there were not to be a First Minister and Deputy First Minister, the powers would cease.
If I am incorrect about that, I will come back in writing to Committee members, but it is my understanding that the section is like that purely because, at the time that the 2022 Act was being discussed, there was not an Executive formed. The previous Government therefore took powers to take action directly, but the section was written in the way that it is to make sure that the Northern Ireland Executive were able to take action once they were formed. If I have said anything this morning that needs to be clarified, however, I will happily write to Committee members.
The hon. Member for West Aberdeenshire and Kincardine asked when we will see the £300 off bills. We stand by the commitment to have £300 off bills by the end of this Parliament. We have been very clear about that—I have been very clear about it and the Secretary of State has been very clear about it. Bills were on a downward trajectory before 27 February, when the situation in the Middle East started. We did not expect to be where we are today four months ago, and we do not know what the situation is going to look like four months from now. We hope that the strait of Hormuz reopens as soon as possible, so we have a free flow of goods through there and oil prices can reduce.
The hon. Member for Thornbury and Yate asked how this will work. I apologise if I did not pick up all the details of her request, but I think she was alluding to heating oil regulation as well. This legislation does not affect the work that the Government are doing on heating oil, which is with the Competition and Markets Authority at the moment. The CMA is working to an expedited timeline to return to Ministers by June with an assessment of how that market is operating. The Prime Minister and the Secretary of State have been very clear that they do not believe the heating oil market is operating in the way that it should, so after the CMA returns that assessment to us, we will study its conclusions to understand exactly what we need to do in terms of regulating that market.
Carla Lockhart (Upper Bann) (DUP)
People in Northern Ireland are struggling: our bills are higher and, as has been alluded to and as the Minister has addressed, a number of folks use home heating oil. The £81 million has been allocated to a Northern Ireland Department—a Sinn Féin Department—that is sitting on spend. Will these regulations allow that £81 million to be released to those who are hard pressed and hard pushed with regard to their energy? Will we be able to benefit exactly as folks in GB have over the last number of months?
Martin McCluskey
As I said in my opening speech, these provisions allow the Northern Ireland Executive now to take forward their own scheme and for that money to be released, pending the agreement of the final business case with the Treasury. As I also said in my opening speech, I have discussed this with the Northern Ireland Minister for the Economy, and we are taking forward these regulations at the Executive’s request to make sure that that funding can be released. Over the three years, it will amount to a £30 bill reduction, because of the removal of 75% of the renewables obligation, which will now be paid by the Treasury. Pending the Northern Ireland Executive coming forward with the business case—it is obviously for them to decide how it is disbursed—that £81 million will be disbursed to people across Northern Ireland.
Carla Lockhart
The Minister is being very generous with his time. I hope he will forgive me for making the point that I have limited trust in the ability of the Sinn Féin Minister in Northern Ireland to get this £81 million out the door to folks. What oversight will the Minister have of that money actually getting to the people who need it? It is sitting there and it needs to be distributed.
Martin McCluskey
Oversight will be done in the ordinary way that all oversight of spending is done. As I said, however, the final business case will be approved by the Treasury before that funding is released to the Northern Ireland Executive. Oversight will proceed as it normally would in such circumstances.
To conclude, these regulations are an example of good, practical intergovernmental working. They support our colleagues in the Northern Ireland Executive to deliver reduced energy bills. To be clear, these regulations are enabling in nature. Policy decisions on the use of the powers are ultimately for the Executive, as I said, with the funds available to them.
Until February 2030, these regulations give the Northern Ireland Department for the Economy similar spending and direction-making powers to those we have used to deliver reduced costs on bills here in Great Britain. These powers will apply for the duration of the transfer of renewables obligation costs to the Exchequer. As previously stated, I therefore do not expect my Department to need to take further legislative steps in relation to the policy in Northern Ireland, with the Executive now taking on the implementation. I commend these draft regulations to the Committee.
Question put and agreed to.
Oral Answers to Questions
Martin McCluskey Excerpts(1 month, 3 weeks ago)
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Mr Gagan Mohindra (South West Hertfordshire) (Con)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
We recognise that the latest price cap that has been announced will be deeply concerning for households, many of whom were already struggling before the Iran crisis hit. That is why the Government have already taken action. We have taken £150 of costs off energy bills, extended the warm home discount to nearly 6 million families and provided over £50 million of immediate support for vulnerable customers who use heating oil. We will, of course, continue to monitor the situation closely ahead of winter and stand ready to take action.
Olly Glover
The energy price cap increase is estimated to cost each household an extra £18 every month, which is the price of a regular essential food shop at a discount supermarket. I note the measures that the Minister says the Government are taking, but in addition will the Government urgently bring forward a social tariff for vulnerable low-income households?
Martin McCluskey
The hon. Member makes an important point. The Government do not want anyone to be making the choice between heating and eating. That is why across Government we are working on a data sprint to work out how we can use household income date to ensure that we are targeting support at the right people.
Shockat Adam
The typical annual dual fuel bill is 40% higher today in real terms than it was in 2021. After accounting for inflation, that means it is £511 more per household. The bad news does not stop there, with Ofgem announcing that the crisis is going to get worse, with a 13% increase to the energy price cap. My constituents in Leicester South were already suffering. Labour promised to fix that, but the cost of living is just getting worse. The Minister says that the only way to protect our country is through clean, home-grown power, so what is he doing to decouple the bills from gas prices and when will my constituents feel that?
Martin McCluskey
The hon. Gentleman’s constituents in Leicester will benefit from the decisions that we have already made. Those decisions take £150 off energy costs and extend the warm home discount and the warm homes plan, providing £15 billion of support. We are delinking and we are already taking action, as the Secretary of State announced last month. Ofgem has pointed out that although last week wholesale gas prices at the price cap went up by 24%, electricity went up by 5%. As it said:
“This reflects the increase in the amount of renewable generation on the system and therefore reduced reliance on gas”.
Mr Mohindra
In my constituency, 3,199 households currently experience fuel poverty due to high energy costs, and costs linked to the Government’s clean energy agenda could mean that household bills are set to rise by at least £100 in the next four years. How long will hard-working families in South West Hertfordshire have to pay the price for Labour’s ideological dash away from domestic energy production until it has a credible plan to fill the gaps in its energy policy?
Martin McCluskey
That comes from a member of a party that learned no lessons from the last energy crisis. We will not make the same mistakes, which is why we are investing in clean power by 2030, which will drive down bills. Only today, we have seen the jobs benefit from the investment in clean energy, supporting 1.1 million jobs, 22,000 small businesses and £105 billion for our economy.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I welcome the Government’s measures to support domestic consumers of kerosene heating oil. I am told that if those who are eligible filled their tanks today, they would pay the equivalent of what they will be paying in February 2027. In my constituency we have big commercial users of kerosene oil, such as distilleries, seaweed manufacturing, tourist amenities and chemical plants. What measures is the Department taking to support commercial users of kerosene oil?
Martin McCluskey
I pay tribute to my hon. Friend for all the work he does to advocate for his constituents in Na h-Eileanan an Iar; I was pleased to visit him recently to see the impact that the increases in heating oil are having on his constituents. We are looking closely at the non-domestic heating oil market, and we will come forward with more proposals in due course.
Ms Polly Billington (East Thanet) (Lab)
I congratulate my hon. Friend and the team on reducing the cost of energy, including with recent efforts to break the link between the volatile gas price and electricity prices. However, every witness before the Energy Security and Net Zero Committee, when we ask how to decarbonise and reduce bills, tells us, “Make electricity cheaper.” What further efforts will the Government make in reforming the energy market in order to achieve that?
Martin McCluskey
My hon. Friend will know that we are taking action, which the Secretary of State announced, to further delink the cost of electricity from gas. As Ofgem said last week in relation to the price cap, we are already seeing the effects of that. Because of the additional renewable generation in the system, we are seeing the effects of that. Every turbine we build, every solar panel we deploy and every reactor we bring online will ultimately reduce our reliance on fossil fuels and bring down the cost of electricity.
Matt Western (Warwick and Leamington) (Lab)
A good way of reducing bills is to reduce consumption. In Germany, about 12 years ago, subsidised mortgages were introduced to help reduce the cost of installing triple glazing in houses. However, in conservation areas in this country, such as in my constituency, people are prevented from installing even secondary glazing, so they cannot reduce their bills, even though they would desperately like to. Will the Minister meet colleagues in the Ministry of Housing, Communities and Local Government to get this issue sorted?
Martin McCluskey
I would be more than happy to meet to discuss that. The warm homes plan—our £15 billion investment in home energy upgrades, which is the biggest in British history—will go a long way to achieving some of the ends that my hon. Friend describes. I point him towards the work that we are doing jointly with the Green Finance Institute to bring forward low-cost consumer loans so that people across the country can benefit from clean technology.
Hannah Spencer (Gorton and Denton) (Green)
One in three households in the constituency that I represent live in fuel poverty, and they face even higher bills from 1 July. Does the Minister agree that the Ofgem energy price cap should be frozen to provide universal support for households now and to give people certainty in the cold winter months ahead?
Martin McCluskey
I welcome the hon. Lady to her place, and I look forward to working closely with her on this brief, as I have done with other colleagues from her party. She will know that we have said we are looking at all contingencies in relation to the support that we may need to offer in the winter, but that has to be paid for. We need to ensure that we have proposals that do not make the same mistakes that the Conservatives made in the last crisis, when they wrote a blank cheque in order to provide support to people, so we will come forward with plans for support in the winter.
Chris Webb (Blackpool South) (Lab)
Blackpool is home to something special and remarkable: a pioneering eco community hub at Palatine library that offers free, independent energy advice and is helping residents to make sense of new technologies to reduce their bills. Since July 2024, when it opened, it has visited 1,300 homes, offered 1,000 winter packs and saved over £111,000 in energy bills. I met a new trainee green doctor there, Luke Hollowell, who is going into homes to support residents. Will the Minister meet me to discuss this eco hub, to ensure that we can keep it going for the long term and maybe roll it out across the country?
Martin McCluskey
I pay tribute to my hon. Friend for the work he is doing on this issue in his constituency, and I would be happy to meet him to discuss it further. I have seen for myself the benefits that green doctors—energy doctors—bring to constituencies across the country when I have visited those programmes. That kind of local support will be central to the work we are doing in setting up the warm homes agency, which will provide advice and guidance to people across the country.
Greg Smith (Mid Buckinghamshire) (Con)
Labour came to office with bold promises to cut energy bills, but in the real world we have seen bills go up, up and up again. In answer to the first question, the Secretary of State said that he wanted to do all he could to cut energy bills, so here are some ideas for how he could do so. He could scrap carbon taxes, he could remove VAT from energy for three years, and he could scrap legacy renewable subsidies—that would save people £200. It is called the Conservatives’ cheap energy plan and, in the national interest, we do not mind if he steals it. Will he?
Martin McCluskey
We can see the economic recklessness of the Conservative party when the hon. Member stands at that Dispatch Box making uncosted promises and claims. Before this crisis, bills were going down—they were going in the right direction—and no one would have anticipated the consequences of the war in Iran. Let us look at the balance sheet of the past two years. This Government have made the biggest investment in warm homes in our history, with record-breaking renewables delivering for 23 million homes. As of today, there has been £90 billion of clean energy investment, and every single wind turbine we deploy and every single nuclear reactor that is online reduces energy bills for consumers across the country.
Clive Jones (Wokingham) (LD)
Tracy Gilbert (Edinburgh North and Leith) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
For too long, heat networks have been left unregulated, with consumers paying the price. That is why I am pleased that we have now established Ofgem as the heat network sector regulator, delivering statutory redress, advice and advocacy to protect households. We aim to develop the regulatory framework further, and recently concluded a consultation on mandating minimum technical standards.
Tracy Gilbert
I thank my hon. Friend for his answer. May I also place on the record my thanks to him for coming to meet my constituents from Saltire Street and Saltire Square, and for listening to what they said about the long-running issues that they have been facing with their district heating networks?
I welcome the regulation that this Government have brought forward. Can my hon. Friend confirm that data on pricing will now need to be reported quarterly to Ofgem, and that this will help increase transparency for my constituents and others?
Martin McCluskey
I was very pleased to meet my hon. Friend’s constituents in Edinburgh to discuss the issues that they face with their heat network. The poor experience that they have had is an example of why we have introduced this regulation, and I commend her for the campaign that she has been running on their behalf. She is right to say that, under the new regulatory framework, heat network suppliers will be required to submit pricing data quarterly to Ofgem, improving oversight.
Jim Shannon (Strangford) (DUP)
He’s the one with the hair, Mr Speaker; I don’t have any.
I welcome the Minister’s response to the hon. Member for Edinburgh North and Leith (Tracy Gilbert). The regulation of heat networks is not just an issue for her constituency, as the Minister well understands. My request to him—he is one of the Ministers who always respond very positively—is that he makes sure that we in Northern Ireland are able to take advantage of the opportunity that the hon. Lady mentioned, and that he gives us a good answer.
Martin McCluskey
The hon. Gentleman will know that I take a keen interest in Northern Irish politics. I spent this morning in a Delegated Legislation Committee, delivering a reduction in bills through the removal of the renewables obligation. I am more than happy to discuss further with him how the regulation of heat networks might operate in Northern Ireland.
Kerry McCarthy (Bristol East) (Lab)
Kerry McCarthy (Bristol East) (Lab)
The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
My hon. Friend is a big champion of not just Bristol, but climate action more generally. Bristol is one of the trailblazing heat network cities, and its City Leap partnership is a model of what other local authorities can consider. I am pleased that we have announced nearly £35 million in this Parliament for the further development of its heat networks.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Tom Gordon (Harrogate and Knaresborough) (LD)
Last September, I met the Minister for Energy Consumers, the hon. Member for Inverclyde and Renfrewshire West (Martin McCluskey), to discuss those who have been adversely impacted by incorrectly installed spray foam insulation. Has the Department considered remediation or support for those affected?
Martin McCluskey
We are considering a range of remediation options in a number of schemes for which the Department is responsible, most of which were operated by the previous Government. We will come forward with proposals soon.
Suella Braverman (Fareham and Waterlooville) (Reform)
I, too, offer my condolences to the Secretary of State.
The Secretary of State will be familiar with the Russian-backed AQUIND application for a submarine interconnector that will cut through Portsmouth naval dockyard, affecting my constituency, and go on to France. The Ministry of Defence has raised national security concerns. We have been waiting over a year for a decision from the Secretary of State on the application. When will he issue one?
Energy Infrastructure Planning Projects
Martin McCluskey Excerpts(2 months, 1 week ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
My noble Friend Lord Whitehead, Minister for Energy Security and Net Zero, has today made the following statement:
This statement concerns an application for development consent made under the Planning Act 2008 by Morgan Offshore Wind Ltd and Morecambe Offshore Windfarm Ltd for the Morgan and Morecambe Offshore Wind Farms Transmission Assets in the east Irish sea off the coast of north-west England, including onshore connection to the electricity transmission network.
Under section 107(1) of the Planning Act 2008, the Secretary of State must make a decision on an application within three months of the receipt of the examining authority’s report unless exercising the power under section 107(3) of the Act to set a new deadline. Where a new deadline is set, the Secretary of State must make a statement to Parliament to announce it.
The statutory deadline for the decision on the Morgan and Morecambe Offshore Wind Farms Transmission Assets was 14 May 2026.
I have decided to allow an extension and to set a new deadline of 14 September 2026. This is to allow time to request further information.
The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.
[HCWS1559]
Draft Warm Home Discount (Scotland) Regulations 2026
Martin McCluskey Excerpts(3 months ago)
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The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Martin McCluskey)
I beg to move,
That the Committee has considered the draft Warm Home Discount (Scotland) Regulations 2026.
It is a pleasure to serve under your chairmanship, Sir Desmond. The draft regulations were laid before the House on 17 March. 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; the draft regulations will extend the scheme in Scotland for a further five years until 2031, providing certainty for households, suppliers and delivery partners.
As the Committee will know, 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, the Scottish Government have not made use of those devolved powers. They have instead requested that the UK Government prepare regulations to lay in this Parliament, on their behalf, to continue the warm home discount for the next scheme period. Scottish Government Ministers must consent to the making of such regulations before they are made; I have sought and received their formal consent.
Let me set out some of the background. 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 the draft regulations. That spending limit will be £92 million for this year, as well as for subsequent years. The draft 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 be able, as they are now, to participate on a voluntary basis.
The draft 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. 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. The draft regulations also set out new eligibility criteria for the core group in Scotland, aligning qualified benefits with those of the Scottish winter heating payment, as of December 2025, for the next scheme period. It is estimated that 345,000 households will receive a core group rebate each year, an increase of roughly 250,000 on 2025-26. The draft regulations will continue to oblige scheme suppliers to allocate the remaining balance of their Scottish spending obligation through non-core group support, delivered via the broader group, and optionally though industry initiatives.
The draft regulations will update the mandatory eligibility criteria for the application-based broader group, which suppliers must consider when providing support via the broader group. The number of rebates available within the broader group is finite and is dependent on the size of each supplier’s obligation in Scotland. Suppliers will continue to determine their own application processes and decide which eligible households receive the rebate within their obligation.
Suppliers will continue to have discretion, subject to Ofgem approval, to extend their eligibility criteria further to other households that are wholly or mainly in, or at risk of, fuel poverty. Under the core group and broader group, around 560,000 rebates are expected to be provided each winter to Scottish households for the rest of this decade, which is almost double the number supported in winter 2023-24, before the scheme was expanded by this Government for winter 2025-26. In addition, the draft regulations will introduce provisions for a late rebate to be issued where a household eligible for the core group did not receive support in the previous scheme year because of an administrative error by a supplier, Ofgem or the Secretary of State.
The draft regulations also include a new power to allow the Secretary of State to direct suppliers to communicate additional information about the scheme directly to successfully data-matched core group customers. Households that are not automatically matched by the Department for Work and Pensions will continue to be notified by the Government, and they will be directed to the warm home discount helpline to determine their eligibility for the core group rebate.
By continuing the warm home discount scheme, through the draft regulations, we are securing vital support for eligible Scottish households each winter—the coldest time of the year, when support is most needed. I commend the draft regulations to the Committee.
Harriet Cross
The warm home discount, as I say, moves bill payers’ and taxpayers’ money around; it does not reduce the cost, and it does not take money off bills. People are still paying it, but in a different place. People who can just manage are paying it for those who just cannot. It is an unfair mechanism that penalises those who are just above the margin. Although we recognise the importance of making sure that bills are affordable for everybody, that does not mean that those who can just pay should be penalised. That is why we brought in, and we support, the concept of a warm home discount to help make bills affordable, but there must be an alternative via the cheap power plan to ensure that we can help everyone.
I would be grateful if the Minister answered a few questions. Why have the regulations only been put before us today, when the 31 March 2026 deadline has already passed? The Minister mentioned that the measure will cost £92 million. I believe that that is for the next five years.
Harriet Cross
It is per year. Does that fall completely on the Scottish Government’s budget, or is it shared between the Governments of Westminster and Holyrood? Given that there is an alternative, via the cheap power plan, that would eliminate the costs rather than moving them, and given that the Government have already addressed some of the costs by removing some of the carbon taxes, why would they not go further and implement more of the Conservatives’ cheap power plan?
Martin McCluskey
I thank hon. Members for their speeches. The hon. Member for Gordon and Buchan asked why there had been a delay in laying the draft regulations. The delay was because of continued negotiations between the UK Government and the Scottish Government. At the outset of the discussions with the Scottish Government, there was ambiguity as to what was devolved and what was reserved; that took us some time to agree with the Scottish Government. Scottish Government Ministers then took some time to determine eligibility for the scheme. The reason that we are putting the draft regulations before the Committee today, rather than having done it before the 2022 regulations came to an end, is that we had to wait for the Scottish Government to decide what the criteria for each of the groups would be.
The hon. Member asked about the cost of £92 million per year. That £92 million is set by the Secretary of State within the part of the regulations that is reserved. That is proportionate to the overall UK figure; £92 million is the amount that goes to the Scottish Government. That is where the reserve power is. There is a UK-wide figure, so UK—in this case, GB—taxpayers will bear the responsibility for the cost of those bills across the country.
The hon. Member also spoke about the Tory cheap power plan, which I have read with interest. I have to say that it is quite thin on detail, and I would argue that some of the suggestions in it would probably bring about further instability within our electricity market.
Let me talk about some things that the Government have done in just the past few months. Our £150 warm home discount is offering targeted support to the most vulnerable people. There is also universal support, in the form of the 7% price cap reduction in the current price cap period. Last week, we announced the British industrial competitiveness scheme, which provides support for industry. The Secretary of State for Energy Security and Net Zero also announced last week how we will go further and faster in our mission for clean power by 2030.
It is important to emphasise to hon. Members that the way to get our energy bills down permanently is through home-grown clean power that we control and can control the price of. It is not through continued exposure to volatile fossil fuels like oil and gas that at this very moment are leaving us exposed to volatile wholesale costs, which are still the largest part of each of our energy bills.
I can guarantee the hon. Member for Inverness, Skye and West Ross-shire that I have noticed no one in Speedos in Inverclyde. Even on the sunny banks of Gourock this weekend, there were certainly no Speedos on display, despite the warm weather. The hon. Member made an important point about the impact of rising energy bills on rural homes and businesses; he will know that provision has already been put in place for additional support for those who use heating oil, with over £50 million delivered by the UK Government and now a £10 million scheme in Scotland. We have always said that we will keep that under review. To my knowledge, the Scottish scheme is nowhere near exhausted, but we will keep under review the amount that might be required for additional support.
I also point the hon. Member towards the decisions in the Budget to remove costs from energy bills, which disproportionately reduce electricity users’ bills over those who have dual fuel, because most of the discount came from the electricity part of the bill. That will have made a difference. However, we also need to close the spark gap between electricity and gas. The action that the Secretary of State took last week, alongside the Chancellor, to move electricity generation to longer-term contracts for difference will help to close that gap. However, I agree with the hon. Member that there is still room for further measures in future.
As I mentioned, fuel poverty is a devolved matter in Scotland. The draft regulations, which we are making on behalf of the Scottish Government, will help more households in Scotland who are facing financial challenges or fuel poverty to receive support each winter, the time of year when support is most needed. This Government are ensuring that lower-income households benefit the most from energy bill reductions.
I should also address the point that the hon. Member for Gordon and Buchan made about redistribution. This is where we will probably find an ideological difference in our approach to support for the most vulnerable. The Labour party supports redistribution. We support the fact that those with the broadest shoulders are being asked to pay a little more on their energy bills for support—
Harriet Cross
Does the Minister think it fair that someone who is £1 or £10 over the limit will have to pay for someone who is £1 or £10 under the limit? This redistribution is penalising people near the limit to such an extent that those who are just outside it will end up worse off than those who are just inside.
Martin McCluskey
That is why we need a balance of universal and targeted support. Currently, through the price cap, those on dual fuel bills will be receiving an average reduction of 7%. Alongside that, we have targeted support for the most vulnerable people in society. I think that that provides us with the right balance to ensure that widespread support is targeted at those who most need it.
We acted in last year’s Budget by taking money off energy bills to tackle the cost of living. These significant changes to how energy is priced have ensured that energy bills have fallen by 7% for an average dual fuel customer paying by direct debit. Once again, I commend the draft regulations to the Committee.
Question put and agreed to.