Draft Warm Home Discount (England and Wales) Regulations 2026

Martin McCluskey Excerpts

Wednesday 18th March 2026 General Committees

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

I beg to move,

That the draft Warm Home Discount (England and Wales) Regulations 2026 be approved.

It is a pleasure to serve under your chairmanship, Mr Dowd. I should say to hon. Members that I have a terrible cold and I can barely hear at the moment, so if I do not answer any questions, it is not because I am avoiding them. The warm home discount scheme has been a key policy in the Government’s approach to tackling fuel poverty and reducing the energy costs of low-income and vulnerable households ever since its inception in 2011.

[Linsey Farnsworth (Amber Valley) (Lab)]

At a recent coffee morning that I held in the village of Holbrook, constituents raised their worries about energy bills. In 2024-25, 6,219 people, or 14.5% of all households in Amber Valley, received the warm home discount. Particularly in the light of ongoing uncertainty on household energy costs due to international events, I am really pleased that the Government are continuing to support the scheme and that I am a member of this Committee. Does the Minister agree that the Government should be focused on this issue absolutely?

[Martin McCluskey]

I know that my hon. Friend is a champion for her constituents in Holbrook and across her constituency. Like many hon. Members, she will have seen the increase in the numbers of people this year who are eligible for the warm home discount because of the decision made by the Government to expand the scheme to 6 million households. Her constituents and the constituents of all hon. Members will benefit from that this year.

Last year, the Government expanded the warm home discount scheme, removing the high cost-to-heat threshold to ensure that an additional 2.7 million of the poorest households across Great Britain received the £150 rebate off their energy bills this winter, with nearly 6 million households now eligible overall. The current scheme period ends on 31 March 2026, and new regulations are therefore required to continue the scheme beyond that date. In September, we consulted on continuing the warm home discount scheme up to and including the winter of 2030-31. The consultation respondents, including consumer advocacy groups, charities and industry, strongly supported proposals to continue the scheme and to continue providing rebates to vulnerable households via automatic data matching.

Today, we are discussing these regulations, as well as some additional changes to the scheme that will allow eligible households across England and Wales in or at risk of fuel poverty to continue to receive the rebate for the rest of this decade. Members will note that the regulations relate only to the scheme in England and Wales. The warm home discount scheme will also continue in Scotland to winter 2030-31 with £92 million a year of funding allocated. Fuel poverty is devolved in Scotland and, under these arrangements, the Scottish Government have determined eligibility for the next scheme period in Scotland within the funding envelope. Separate regulations have been laid in this Parliament to continue the scheme in Scotland, and I look forward to discussing these regulations with the House in due course.

[George Freeman (Mid Norfolk) (Con)]

What provision do these measures make for the disproportionate impact of fuel poverty in rural areas? Treasury figures show that cost of energy increases have disproportionately hit rural households, rural public services, rural charities and rural businesses, including in my Norfolk constituency. The risk of fuel poverty is 15% higher in rural areas. Do these regulations include any provision that tackles this traditionally overlooked injustice?

[Martin McCluskey]

I accept what the hon. Gentleman says about fuel poverty having a disproportionate impact in rural areas. The warm home discount applies equally, regardless of whether someone is in a rural area or an urban area, but the Government are taking other actions including through our warm homes plan, which has a particular focus on rural households, and rural retrofit to ensure that everyone is able to take advantage of it. Other areas of the Department’s work are focused on rural homes.

Turning to the detail of today’s statutory instrument, it will introduce the Warm Home Discount (England and Wales) Regulations 2026. These regulations will extend the scheme in England and Wales for five more years from 2026 until they expire in 2031. The regulations will continue to oblige energy suppliers with more than 1,000 domestic accounts to participate in the scheme. The regulations will ensure that, as is the case currently, energy suppliers with fewer than 1,000 domestic accounts can choose to participate voluntarily in the scheme.

Under the scheme, participating energy suppliers are obliged to provide support to eligible households through a rebate provided directly to their energy bill, valued at £150. Eligibility for the rebate will continue to be set out by the Secretary of State in an eligibility statement, which is published for each scheme year. Following the removal of the “high cost to heat” threshold and the expansion of the scheme in 2025-26, the Government are committed to maintaining the current eligibility for the rebate in England and Wales, based on receipt of means-tested benefits, for a further five years. Eligibility for the scheme remains unchanged, but the regulations introduce a more streamlined approach to administration, without impacting eligibility.

The existing core group 1 and core group 2 will be merged into one core group in England and Wales, with a view to enabling clearer communication and messaging to potentially eligible households. That change was broadly supported by consultation respondents. We put out a range of communications ahead of and during each scheme year to eligible households, and will continue to do so for the next scheme period. The automatic data matching process for the core group in England and Wales will continue, using data held and processed by the Department for Work and Pensions, with the majority of eligible households—typically around 96%—expected to be automatically data matched, meaning that they will receive the rebate without taking any action.

In addition, the regulations will continue to oblige scheme-supported energy suppliers to participate in the industry initiatives element of the scheme. Industry and consumer advocacy groups strongly supported its continuation in the consultation ahead of these regulations. The regulations set out a range of permitted activities overseen by Ofgem, through which energy suppliers can deliver towards their non-core obligations, supporting eligible households in fuel poverty or that are in a group at risk of fuel poverty. Permitted activities include benefit entitlement checks, energy efficiency measures, energy advice, debt relief and financial assistance payments of £150.

Scheme energy suppliers can also choose to dedicate non-core spend towards the park homes scheme, which I know is of interest to a number of Members, who have corresponded with me on the topic. It provides eligible households with £150 of support towards their energy bill. Industry initiatives provide vital support and are often delivered by the third-party partners of energy suppliers, including charities. The value of support available for industry initiatives will continue to be updated as under the current scheme period. The regulations will also introduce changes to the administration of the scheme and enhance consumer protections for eligible households.

The regulations also include a new provision that can enable the Secretary of State to direct suppliers to communicate directly with our own successfully data-matched customers to provide further information about the scheme, including information related to automated decision making. Where that provision is used, the Government would continue to notify households that are known as unmatched households, following the automatic data matching process, where additional information or evidence is required to determine their eligibility. Where a household is deemed unmatched, the Government will continue to notify them to contact the warm home discount helpline to determine their eligibility for that scheme year.

The regulations make provisions for a late rebate of £150 to be paid by a scheme supplier if the Secretary of State is satisfied that an eligible household did not receive a rebate in the preceding scheme year due to an administrative error by a scheme electricity supplier, the Secretary of State or Ofgem. In addition, the regulations will replace fixed spending targets with annual estimates based on the number of eligible households expected to benefit from a rebate each winter to predict more accurately scheme costs.

Tackling fuel poverty is a priority for the Government. We recognise that too many households cannot afford to heat their homes at a reasonable cost. That is why, in January, we published our new fuel poverty strategy alongside our warm homes plan, to ensure that many more fuel-poor households are protected by 2030. The continuation of the warm home discount scheme through these regulations will provide vital support for eligible households each winter, at the coldest time of year when support is most needed. I commend the draft regulations to the Committee.

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[Martin McCluskey]

I thank hon. Members for their contributions. On the points raised by the Opposition Front Bench spokesperson, in Q2 of this year energy bills will be lower than they were in 2024. He does not need to take that from me; he can see that in the research of the Resolution Foundation. He talks about expensive costs of energy. I agree that, in this country, we have some of the most expensive energy. That did not happen in the 18 months of a Labour Government, that has been building for a number of years, including during the period that he was in this role in the Department for Energy Security and Net Zero.

The only thing that seems to have changed with the hon. Gentleman over the last 18 months is that he has abandoned his commitment to clean power and net zero, which was well documented, not just in Hansard, but on his own website. We discussed that in the Chamber just a few months ago. His policy, which would see us turn away from clean power, is, bluntly, a road to ruin. We would expose people to further volatility in fuel prices and to the fact that we are already over-exposed to the price of gas. We would also continue to make ourselves reliant on energy supplies that are coming from petrostates. Over the last few weeks, we have seen the impact of being overly reliant on oil and gas supplies coming from overseas.

[Lewis Cocking (Broxbourne) (Con)]

If the Minister issued new oil and gas licences for the North sea we could produce more of our oil and gas here at home. That would mitigate some of the problems that he has just raised about being over-reliant on oil states.

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[Martin McCluskey]

I am not sure if the hon. Gentleman—[Interruption.]

[The Chair]

Order. There can be a little bit of barracking, but not too much.

[Martin McCluskey]

I am happy to be barracked under your chairmanship, Mr Dowd. Turning to the point that the hon. Member for Broxbourne raised, he knows that it would not matter if additional oil were extracted from the North Sea—it would not reduce the price of domestic energy in this country. It would not have any impact. If he has evidence to the contrary, I will be more than happy to take another intervention for him to demonstrate that energy prices would reduce if we extracted more oil from the North sea. No? Okay.

Moving on to the Liberal Democrat spokesperson, I thank her for the constructive tone of her speech. On the point around debt, Ofgem have consulted on a debt relief scheme, and more will be coming on that in the near future. On data sharing, I share her desire to ensure that there is far more data sharing. That is something that I have had discussions about, not just with the Department for Science, Innovation and Technology—and she may be aware of the kickstarter programme that is looking at how we can better share household income data—but with the Department for Health and Social Care too, specifically, around how we share data on vulnerability and health.

There are some really great examples at a local level. For example, Beat the Cold is an organisation in Stoke that is already sharing data between local NHS organisations and third sector organisations in order to reach the right people with vulnerability. The point for me is, if that can be achieved on a local level, we should be able to achieve something similar on a national level. The hon. Lady talks about cold, leaky homes, and that is obviously a focus of the Government’s £15 billion warm homes plan, which is investing in that area. I will gently say to her that, while we did cancel the ECO programme, that was because it failed and did not provide good value for money.

We have put an additional £1.5 billion into capital schemes through DESNZ, which will reach low-income people across the country. I point towards the announcement that was made by the Secretary of State on Sunday about the additional funding that will go into mayoral combined authorities, and elsewhere, for low-income schemes. That is from that £1.5 billion that resulted from the cancellation of ECO. On ECO, there were instances where, for example, about half of the cost was going into finding people to apply measures to, rather than actually applying measures, so from a value for money point of view, we needed to make sure that that worked far more effectively.

To sum up, we are committed to delivering the £150 warm home discount for at least another five years to support the households in England and Wales who need our help most. The regulations will deliver a warm home discount scheme that is more transparent and provides stronger consumer protection and greater clarity around eligibility. I commend the draft regulations to the Committee.

Question put and agreed to.

Heating Oil Support

Martin McCluskey Excerpts

Monday 16th March 2026 Commons Chamber

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

Thank you, Madam Deputy Speaker. I take my responsibilities under the ministerial code very seriously and will make sure that that message is communicated.

With permission, I wish to make a statement on the action we are taking to protect British people from the soaring costs of heating oil due to events in the middle east. It is now more than two weeks since the conflict in the middle east began. My thoughts and the thoughts of the whole House will be with the millions of people affected, including the British citizens in the region and the troops serving there, but just as we saw four years ago when Putin invaded Ukraine, the impact of this conflict is being felt far beyond the battlefield. With Iran continuing to target energy infrastructure and shutting off the strait of Hormuz, the price of crude oil on the international market has rocketed, and I know that the 1.5 million UK households that use heating oil to heat their homes will be understandably concerned. Indeed, some customers have already reported prices doubling or being unable to secure a delivery at all. Let me be clear that this Government will not stand by and let British families suffer. Let me set out the direct action that we are taking today.

First, we will always stand up for the most vulnerable in our society, and I can confirm to Parliament that we are committing over £50 million to help low-income families who use heating oil. We are allocating this funding where the greatest need is, based on census data, and it will go directly to the devolved Governments with the expectation that it will be used to support vulnerable households. We know that this is a particular issue in Northern Ireland, where almost two thirds of homes rely on heating oil, and we have allocated £17 million to support them. We will continue to work closely with the Northern Ireland Executive on all our plans that I will outline in this statement, given the particular circumstances that exist there and the reliance on heating oil.

In England, funding will be distributed by local authorities via the crisis and resilience fund, which comes into effect from 1 April, and £3.8 million will be passed to the Welsh Government and £4.6 million to the Scottish Government to deliver to affected households through existing programmes. I am today calling for the Scottish Government to ensure that this money is passed to Scottish families as quickly as possible.

Secondly, as well as providing direct support for consumers, we are working with the sector to ensure that pricing is always fair, transparent and justified. This Government will not tolerate profiteering or unfair practices, so we are in daily contact with industry to understand the drivers of recent price movements and have reminded heating oil distributors of their commitments under the trade association code of practice. The Chancellor has also written to the Competition and Markets Authority to ask it to remain vigilant across heating oil prices and to tackle unjustified increases, and we urge customers to share any evidence of price manipulation with the CMA.

We also recognise that the heating oil sector is currently under-regulated. Unlike gas and electricity, the heating oil market is not regulated by Ofgem. We are going to put that right by exploring what regulations might be needed to ensure that consumers get a better deal and by exploring new ways to ensure that households are better protected. This will include: securing an agreement with industry on a strengthened code of practice to rapidly provide enhanced protections to customers; introducing stronger consumer protections in the heating oil market, which could cover dispute resolution, a greater variety of repayment options for those facing hardship, greater price transparency and enhanced protections for vulnerable groups such as the elderly; supporting the CMA’s plans to carry out a more comprehensive examination of the UK’s heating oil industry; and exploring the creation of a new ombudsman or the appointment of a regulator such as Ofgem to champion consumers.

Thirdly, this conflict is yet another reminder that we must get off the rollercoaster of global fossil fuel markets as soon as possible and on to the path of clean, secure, affordable energy that this country controls. This is the only way to protect the British people from energy price shocks and ensure that we are no longer buffeted by the headwinds of conflicts that we had no part in starting. Thanks to our mission to make the UK a clean energy superpower, we have already brought in £90 billion of investment in clean energy, but now, in the light of events in the middle east, we have set out a package of measures to help us go even further and faster in pursuit of national energy security.

We will bring forward the next renewables auction, just months after our most successful ever auction secured enough power for the equivalent of 16 million homes. We will make plug-in solar available for the first time in Britain so that families can buy a low-cost panel straight from a supermarket and set it up on their balcony or in their garden. We will speed up the delivery of our £15 billion warm homes plan—the largest home upgrade programme in British history. We will also reform nuclear regulations following the Fingleton review so that we can fast-track new nuclear power stations.

Behind every decision this Government take is a simple principle. Whatever the challenges, we will always support working people; we will always fight their corner. That is why we are directly helping those affected by the spike in heating oil costs; it is why we are cracking down on any suppliers who are cancelling orders or jacking up prices, while working at pace to ensure that the sector is properly regulated; and it is why, despite the opposition from parties on the other side of the Chamber, we are doing everything we can to take back control of our energy, ending our reliance on these unstable global fossil fuel markets and instead bringing in an era of new, clean, home-grown energy that we control in this country—an era of economic growth, new good jobs, unprecedented investment and real energy security. That is how we will ensure that ordinary working British people never pay the price for foreign conflicts and our overdependence on fossil fuels again. I commend this statement to the House.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

I thank the Minister for giving me advance sight of the statement, although I really have to take issue with the Prime Minister’s earlier comments, taking credit for Ofgem’s decision to lower the energy price cap. That decision was taken not by the Government, but by Ofgem using a Conservative mechanism, and it was in fact taken weeks before the current crisis began. But why let the facts get in the way of this Government’s spin?

I am glad to see that the Government have today taken steps to support those households across Great Britain and Northern Ireland that rely on heating oil—steps that those of us on this side of the House called for when prices began to rise weeks ago. Those households are, as the Minister has highlighted, acutely exposed to price shocks, and the stories we have heard from consumers across the country are very concerning indeed. Just this morning, I heard from a constituent who faces a lump sum bill of over £1,000. These consumers are often served by a single local supplier, meaning that there is no realistic competition.

Let us be under no illusions: this announcement has come about only after the pressure put on the Government by the Opposition. The Leader of the Opposition and my right hon. Friend the Member for East Surrey (Claire Coutinho) called for these actions almost two weeks ago. Like everything with this Government, they end up doing the right thing only after weeks of dither, delay and inaction—but today’s announcement will be welcome news for rural households, and nowhere is that more apparent than in Northern Ireland, where over 60% of homes rely on oil for heat.

Although I welcome the announcement, I would be grateful if the Minister could provide some clarification. First, can he explain what, if any, support will be made available to those who heat their homes with liquid petroleum gas? Furthermore, it appears that the allocation of funding for Scotland, Wales and Northern Ireland is to go directly to the devolved Administrations and not directly to local authorities. Considering that the Minister represents a Scottish constituency, he understands just as well as I that handing over a cheque to the Scottish Government does not guarantee that money will be spent where it was intended to be spent. Can he therefore outline how this Government will ensure that those in Scotland, Wales and Northern Ireland get the support they need, and that this funding is not siphoned off for other priorities determined by devolved Ministers? Why was this money not awarded directly to local authorities in those nations as it is being delivered across England?

It is also my understanding that this funding is inclusive of Barnett consequentials. Could the Minister confirm whether that is the case? If it is, will he confirm that Scotland is being short-changed due to the higher proportion of households on heating oil than the Barnett formula would account for?

The Government could go further and heed our calls to deliver a 20% cut to everyone’s energy bills—and I mean everyone’s—through the Conservative’s cheap power plan by axing the carbon tax and the rip-off wind subsidies now. That cut would be worth around £165 to the average family. The Government should also bring about another one of their famed U-turns and cancel their planned fuel duty rise later this year—a rise that will add £156 to struggling families’ bills, because Labour’s plans always lead to more costs for families and businesses.

Let us take today’s announcement as an example. We cannot ignore that this support will be funded through Labour’s tax rises on working people. Why? Because this Government have made a choice—a political choice—to shut down the North sea and forgo £25 billion of tax receipts that an attractive, investable and successful North sea oil and gas industry would, and still could, provide. Backing the UK’s oil and gas industry is about driving the economic growth that we so desperately need, which in turn would deliver greater tax receipts than the current regime. It is about becoming more energy secure. One hundred per cent of all the gas produced in the British North sea is used in the British gas grid. The less we use from British waters, the more we have to import—at a higher cost and with a bigger carbon footprint—from Qatar, the USA and Norway, which continue to explore in the same sea in which we are prevented from exploring.

Backing the UK’s oil and gas industry would support a vitally important skilled workforce—a workforce that right now is packing up and going overseas. What will it take for this Government to change course—revenue, investment, job security? What is it that this Government do not get? Just today, the CEO of RenewableUK joined the chorus of voices calling for an overhaul of this disastrous act of economic self-harm being inflicted by this Labour Government. We read in The Times at the weekend that we are currently led by the “least intellectually curious” Prime Minister of all time, so it is no surprise that the Secretary of State has been given free rein to inflict his myopic vision of a future—[Interruption.] Those are not my words; they are the words of people in the Cabinet today! Surely at this time of such global instability, the case for a thriving oil and gas industry is clearer than ever.

We welcome the action announced today on heating oil, but there are serious questions—not just from me but from the industry, the renewables sector, the trade unions, and, frankly, everyone other than those sitting on the Labour Benches—over wider Government energy policy that need to be answered, and answered soon.

[Martin McCluskey]

Dear, oh dear! Where to begin? I will do my best to wade through the many points that hon. Gentleman raised.

First, the energy price cap is reducing on 1 April because of actions that this Government took to take £150 out of energy costs. That will see every bill in this country reduced. People listening should hear that their bill will go down in April, and that is protected to the end of June. The hon. Gentleman appears to be criticising us for a lack of speed. If he would like to volunteer how many days it took for the last Conservative Government to provide support for people on heating oil, I am all ears. How long did it take his party in government? It took them nearly 200 days. We are around three weeks into this conflict in the middle east, and we have come forward with support today.

LPG will be eligible in so far as the English schemes that we have funded additionally today through these actions, and we are making that clear to local authorities in a letter that has been sent from Ministry of Housing, Communities and Local Government Ministers today. It will be for the devolved Administrations—Wales, Scotland and Northern Ireland—to determine how they distribute the funds. I hope that they will work at the same speed as this Government to ensure that they are available on 1 April, but all nations already have crisis funds available that they could be deploying for this purpose, just as we will be deploying them for this purpose in England from today; if there are people in crisis now applying to the existing household support fund, they will be eligible for support from today, and the additional funding will come after 1 April.

The hon. Gentleman talked about the funds being Barnettised, but the funds are not being Barnettised; Scotland is not being, in his words, short-changed. The funds are being allocated based on census data on how many heating oil-fuelled households there are in each individual nation. That is why Northern Ireland comes out with £17 million, Scotland with £4.6 million and Wales with less. It is not a Barnett share; it is based on the number of households that use heating oil.

Finally, I do wish that the hon. Gentleman would stop coming to this Chamber and talking down the UK’s oil and gas sector. [Interruption.] No, I do wish that he would stop talking it down. He has implied from his Dispatch Box that the taps are being turned off in the North sea; they are not. The North sea is working today at full capacity and has been for some time. On Thursday, I was in Aberdeen, speaking to workers in that sector and to workers in floating offshore wind, who will benefit from our decision to invest in clean energy. If we take our eyes off the opportunities that will be available in future, it is a road to ruin. The hon. Gentleman will also know that more extraction from the North sea will not reduce the price of energy. We are a price taker, not a price maker. That is not our road to cheaper energy for households.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Chair of the Energy Security and Net Zero Committee.

[Bill Esterson (Sefton Central) (Lab)]

Unlike the shadow Minister, the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), I give an unqualified welcome to today’s announcement, which will support some of the most vulnerable people in the United Kingdom—some of those in greatest fuel poverty. I have to say to the Minister, though, that we invited him to join us at our Committee session tomorrow afternoon to discuss the warm homes plan, following last week’s excellent evidence session. So far he has not been available. It is not too late for him to change his mind if he wants to, but for now I will ask him one question. Given that people on heating oil are at the sharp end of the impact of the spike in oil and gas prices, will he consider giving them preferential treatment when it comes to the warm homes plan so they can benefit from the range of measures, including on energy efficiency, and the reduced costs that it can deliver for them?

[Martin McCluskey]

I am always happy to come to the Committee; I understand that discussions are ongoing about a longer evidence session just on the warm homes plan to give it the attention that I am sure my hon. Friend agrees it is due. I agree that the warm homes plan should target some of the lowest-income people in our country. That is why we have allocated well over £1 billion for some of the low-income schemes in the warm homes plan, and why we have also focused on how we target rural households, many of whom will be affected by the heating oil situation.

[Madam Deputy Speaker (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Pippa Heylings (South Cambridgeshire) (LD)]

We welcome the Government finally taking action to protect households from soaring energy costs due to the middle east crisis, following calls from those on the Liberal Democrat Benches and MPs of all parties. However, today’s intervention is a sticking-plaster solution, with too many households potentially falling through the cracks and not receiving support. We have heard that those families who must use oil for heating are the most exposed and defenceless, caught in the crossfire of Russia’s war in Ukraine and now the volatility in the middle east.

The heating oil market needs regulating. The Liberal Democrats are calling for the immediate introduction of a three-month VAT holiday on heating oil, as well as a proper price cap, because these households deserve the same protection as those that use gas and electricity. The real way to protect households and businesses is not by parroting Trump’s “Drill, baby, drill” mantra and buckling in for more roller-coaster rides that burn a hole in people’s pockets but by accelerating the transition to secure, home-grown clean energy that we control and extending preferential treatment to the warm homes plan, to help those homes that use heating oil to electrify and get off volatile fuel that we do not control.

Will the Government agree with the Liberal Democrats and set a price cap for heating oil to shield off-grid households? Also, if the Government want to provide targeted support, will they learn the lessons from the covid pandemic and the 2022 energy crisis and immediately enact a data-sharing scheme between Departments, including the Department for Work and Pensions and the NHS, and devolve this to local authorities to enable them to deliver targeted support to those who need it the most through, right now, the crisis and resilience fund that they want to be adopted on 1 April?

[Martin McCluskey]

I thank the hon. Lady for her constructive tone, for working together on some of this, and in particular for her comments on the need to move towards a transition to ensure our energy security and, ultimately, to lower bills.

On the hon. Lady’s point about a cap, the market for heating oil, as she will know, is very different from the market for electricity and gas. The reason that the price cap was introduced many years ago was the potential loyalty penalty that existed, whereby consumers who were with an individual company for a long time were penalised for that. Heating oil, by contrast, is supplied through a highly competitive market. That is why we have asked the CMA to look at this in more detail and we will examine its findings to establish what regulation may be required.

On the hon. Lady’s comments regarding the warm homes plan, the low income fund will target many of those people. She may also be interested to know that about 50% of the grants given out under the boiler upgrade scheme are to rural homes, many of which will be in this situation, that are transitioning from oil heating to electrified heating through a heat pump.

[Ms Polly Billington (East Thanet) (Lab)]

I am very grateful to my hon. Friend for his statement. Giving support to people who are off grid is vital; however, Thanet Earth, which is near my constituency and employs a number of my constituents, actually grows 20% of the tomatoes that are sold in this country. The business is profoundly energy intensive and is doing all the right things on decarbonising its energy supply, yet it is still profoundly affected by such fossil fuel spikes as those we are experiencing today. Will the Minister look at what is possible to support such energy-intensive industries through this energy crisis?

[Martin McCluskey]

I know that my hon. Friend has been a champion for such industries in her constituency, including Thanet Earth. The Minister for Industry, my hon. Friend the Member for Stockton North (Chris McDonald), is working through the implications of this crisis for such businesses as we speak, and will come forward with plans in due course.

[Mark Garnier (Wyre Forest) (Con)]

I thank the Minister for his statement. One characteristic of volatile energy markets is that when wholesale prices rise, consumer prices tend to rise like a rocket, and when the wholesale price stabilises the consumer price tends to fall like a feather. Can the Minister assure me and my constituents that in the conversations that he is having with the Competition and Markets Authority he is also looking at whether, when the market returns to normality, prices will fall as quickly as they have risen in this volatile moment?

[Martin McCluskey]

The hon. Member makes an important point. I know Ministers in my Department have been discussing that with the CMA and will carry on doing so. The CMA has started its work looking at the heating oil market and will, I hope, come forward soon with proposals that we can examine, to determine whether further regulation is required.

[Mike Reader (Northampton South) (Lab)]

I welcome the Minister’s statement, which will reassure a lot of families in Northamptonshire. Could he give us a bit more detail on the timeline under which this will be brought in, and assure people across Northamptonshire that the process will be easy to access, without bureaucracy?

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[Martin McCluskey]

I know that my hon. Friend has been fighting hard for his constituents in Northamptonshire during this crisis. We are topping up the crisis and resilience fund with this additional funding across England that will be available from 1 April. Local authorities in affected areas have received notification today of the additional funding that will be available to them, but they can also use existing means to distribute funds to those in crisis, without waiting until 1 April. The message to my hon. Friend’s constituents would be to contact their local authority today, and that more funding is coming on 1 April.

[Harriet Cross (Gordon and Buchan) (Con)]

The Minister’s statement included what I am sure were some very sincere words. He said:

“Whatever the challenges, we will always support working people; we will always fight their corner. That is why we are…doing everything we can to take back control of our energy”.

I did not want to have to break this to the Government, but they are not fighting for working people or taking back control of our energy by actively closing down the North sea. Thousands of people are losing their jobs every month and our energy security is going down. The only way the Minister can remedy this is by removing the ban on new licences and scrapping the energy profits levy.

[Martin McCluskey]

Once again we hear a voice from the Opposition talking down the UK’s oil and gas sector. The North sea is not being shut down. [Interruption.] It is not being shut down; it is producing oil and gas today, and will play a role in this country for years to come. It is also important for Opposition Members to remember that not a single barrel of additional extraction from the North sea will reduce the price of energy in this country. It will not help any of our constituents with the cost of their energy.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

I thank the Minister and the Government for their swift response; £4.6 million to Scotland will be very welcome in my constituency, where up to 50% of homes outside the town of Stornoway rely on heating oil. What discussions has the Minister had with the Scottish Government to ensure that the £4.6 million is distributed through local authorities through the crisis grant fund; that local authorities have maximum discretion in how they distribute that fund; that we have maximum accountability on how the money is spent; and that we have maximally swift delivery of this much needed support?

[Martin McCluskey]

My hon. Friend was one of the first people to come to me with concerns around the heating oil situation in his constituency. The Minister for Energy had these discussions with the Scottish Government towards the end of last week, and I will have further such discussions over the next few days. I would hope that the Scottish Government take as wide an interpretation around their crisis funding as this Government have about England, and ensure that it is made clear to local authorities that the support is available for those on heating oil and those on liquefied petroleum gas. How the devolved Governments distribute those funds is, obviously, a matter for them.

[Tom Gordon (Harrogate and Knaresborough) (LD)]

It is estimated that over 20,000 homes in North Yorkshire rely upon heating oil, including constituents in the rural part of my constituency in villages outside Occaney, Copgrove, Farnham, Flaxby and others. They already face what is known as a rural premium, with households paying more for everyday essentials. Given that reality, how can the Government justify offering only limited support to households that now face soaring heating oil costs?

[Martin McCluskey]

My priority, and that of the Government, in dealing with the situation in the middle east has been to come forward as quickly as possible with support, which today we can guarantee will be available for those on heating oil from 1 April. For constituents who do not use heating oil, electricity and gas prices will reduce on 1 April by 7%. We will keep the situation under review. It is fast moving. Three weeks ago, we would not have thought that we would be in the situation we are in today. We will keep the matter under review, but our priority has been to get this money to the people who need it as quickly as possible.

[Ben Goldsborough (South Norfolk) (Lab)]

With one in four households in South Norfolk relying on heating oil, the announcement today will make a huge difference to my constituents and I thank the Government for their extremely swift action. As local discretion is to be exercised by local authorities, will the Minister make it clear to local authorities up and down England that they need to ensure this addresses as many people as humanly possible, to give them the support when they need it most?

[Martin McCluskey]

I can give my hon. Friend that assurance, and the Minister for Local Government and Homelessness has written today to the leaders of councils in areas that are receiving additional funding to make this clear.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I am curious about the details as I have been raising this issue on behalf of my constituents in West Worcestershire all week, many of whom rely on heating oil and liquefied petroleum gas. How much extra money is going into the crisis and resilience fund in West Worcestershire, and how will local authorities prevent “first come, first served” and instead ensure that those with the emptiest tanks get access to the money first?

[Martin McCluskey]

I will write to the hon. Lady with the details around her local authority area, but we are confident that the amount going into the crisis and resilience fund—both additional and current funding—will be enough to meet the demand for this period while the heating oil prices are increased. As I said to other hon. Members, we will keep the situation under review as it progresses.

[Cat Smith (Lancaster and Wyre) (Lab)]

On behalf of my constituents, I thank the Minister for his speedy response to the situation, which I know from my inbox has been very welcome to those using heating oil, but can he reassure us that the correspondence from Government to Lancashire county council will make it clear that those on LPG will also be eligible for the fund?

--- Later in debate ---

[Martin McCluskey]

I can assure my hon. Friend that guidance will be provided to local authorities to ensure that LPG customers are also dealt with through the fund.

[Bradley Thomas (Bromsgrove) (Con)]

While I welcome the Minister’s statement, my constituents and I have a few questions. How many households does the Minister project that this will be applied to? What does he foresee the average amount of support being? Is there a qualifying criterion in terms of benefits or household income? Will the fund be disbursed via the upper tier or lower-tier council, and should my constituents apply to Bromsgrove district council or Wiltshire council for support?

[Martin McCluskey]

As the hon. Gentleman will know, the current household support fund and the future crisis resilience fund are discretionary and it will be for the local authorities to determine, under the guidelines, what they will be able to provide. On the support available and the number of households affected, we are confident that this can meet demand over this period of time. As I said in response to other hon. Members, the important thing is ensuring that this money reaches people as quickly as possible, and we did not wait around, as the previous Government did, to provide support to these households.

[Lizzi Collinge (Morecambe and Lunesdale) (Lab)]

I thank the Minister for his statement and the swift response to the need of my rural constituents who are reliant on heating oil and LPG. This crisis has shown that our strategic approach of getting off the reliance on global fossil fuel markets is absolutely the right one, but it has also exposed the under-regulation of the heating oil market domestically, so can the Minister tell me what this Labour Government will do to tackle that under-regulation?

[Martin McCluskey]

I thank my hon. Friend for her comments on the need to transition as quickly as possible. Through this crisis we have seen the volatility that this country is exposed to because of our reliance on fossil fuels. For the sake of people across the country, we cannot allow that to continue. On regulation, we have had discussions with the Competition and Markets Authority, which has set out what it is looking at in terms of the heating oil market. It will come forward with recommendations and a report, which we will study carefully to determine the need for regulation.

[Claire Young (Thornbury and Yate) (LD)]

With prices doubling or tripling, a 97-year-old constituent cannot afford her next bill and another family has no hot water. Reporting price gouging to the CMA will not help them now, so what support will the Government give those above the lowest income thresholds who cannot afford the next delivery, and what will Ministers do to stop public money allocated now simply filling the pockets of profiteering suppliers?

[Martin McCluskey]

No one should have to face the kind of situation that the hon. Lady has just described, which is why we are coming forward today with support. That additional funding will be available through the crisis and resilience fund from 1 April. However, as I said in response to an earlier question, constituents can already go to their local authority, and we are giving clear guidance to local authorities on the support that they can offer today, and we are expanding some of the guidelines for the existing funds to make it clear that they can provide support for people on heating oil and LPG. On the hon. Lady’s latter point on regulation, as I have said, the CMA is investigating this. There are clearly issues in the heating oil market, as we can see in what has happened over the past couple of weeks. That is why we have asked the CMA to look at that. It has agreed and we will study its conclusions and come forward if necessary with regulation.

[Graeme Downie (Dunfermline and Dollar) (Lab)]

I thank the Minister for his statement and for the very quick action taken by this Government. He mentioned his hope that the Scottish Government will act as quickly as this Government have to pass on these savings to people who use heating oil. Will he ensure that we get more than just hope, as we want an assurance that the SNP Government will not fail my constituents, as they have done so many times before? Will he keep up the pressure on the SNP to deliver what it should be delivering for my constituents and others?

[Martin McCluskey]

I know that my hon. Friend would possibly share some of my concerns, which is why I have been so clear today that the Scottish Government should move at pace to ensure they can provide the same level of assurance to people across the country today that we are, and that support is on the way and that from 1 April people will be able to apply to those funds. Some £4.6 million is being provided to the Scottish Government for this action, and we would want to ensure that every single penny of that reaches the people who need it.

[Simon Hoare (North Dorset) (Con)]

On behalf of the low-income families of North Dorset, I very much welcome the Minister’s statement, but what help can he give to those who are not classified as low income but who are, in the old parlance, just about managing? Surely a VAT holiday for all customers would be of benefit right across the piece. May I urge the Minister to consider that for those families? There will also be a number of rural buildings—doctor surgeries, community halls, parish halls, village halls—that use heating oil, and for which the costs will be very high. They operate on very limited budgets and give a lot of support to elderly and vulnerable people in our communities. Will the funds available also be open to them?

[Martin McCluskey]

I thank the hon. Member for his comments. On the point about regulation, it is important to remember that we have already taken action, and not for heating oil but for people on traditional electricity and gas, whose bills will reduce by 7% in April—that is a universal offer, available to everyone. Obviously, alongside the universal offers there are targeted offers, such as ours today on heating oil. On non-domestic premises, the Minister for Industry, my hon. Friend the Member for Stockton North, is looking in detail at the situation and will come forward with more proposals later. Today’s announcement is for domestic premises, but we will come forward with details for non-domestic.

[John Whitby (Derbyshire Dales) (Lab)]

I very much welcome the Government listening and acting so quickly on this subject. On 5 March, one of my constituents had an order of 500 litres of heating oil cancelled and was invited to remake the order, but he was then told that it would cost around twice as much as the previous order. Rob, who is on the state pension and is a wheelchair-user, could not afford to remake the order and therefore has had no central heating from 5 March. Does the Minister agree that all providers should be honouring contracts previously made?

[Martin McCluskey]

I thank my hon. Friend for bringing that case to my attention, and I ask him to write to me with more details. From conversations about this case and others that have been mentioned across the House, it is clear why we need regulation in this market and why we need to investigate it. I am glad that the CMA is taking that forward.

[Robert Jenrick (Newark) (Reform)]

The Treasury is raking in tens of millions in increased tax revenues from rising fuel and energy prices on the one hand; on the other, it is providing some mild relief to a chosen few. The Chancellor is robbing Peter to pay Paul, and then expects the country to give her a pat on the back. Will the Minister do what could be done now: cancel the proposed increase in fuel duty for September and provide some genuine relief to everyone who is feeling hard pressed right now?

[Martin McCluskey]

The right hon. Gentleman will know that fuel duty is frozen and, as the Prime Minister set out last week, we will keep that under review. It is important that people who are listening to these discussions hear that fuel duty is frozen, and that just as we are taking action with electricity and gas in April, we have taken action today. The right hon. Gentleman calls them the chosen few. I would say we are targeting support at those who need help now to make sure that people can heat their homes sufficiently. This is the Government taking action today to make sure that people are better off and that they see the effects through this period.

[Jenny Riddell-Carpenter (Suffolk Coastal) (Lab)]

I thank the Government for acting so swiftly—the previous Government took 200 days to act when we faced a similar crisis after the start of the Ukrainian war. I want to ask a couple of questions. First, can the Minister confirm that LPG is included in the package? Many of my constituents are on LPG, not just heating oil. Secondly, will he set out how the package will help those who are financially vulnerable and also medically vulnerable, including disabled constituents, many of whom are at greatest risk and have shared concerns that they have to have their heating on 24 hours a day?

[Martin McCluskey]

I can confirm that LPG is included in the package, and guidance will be provided to local authorities to make it clear that it is for LPG as well as for heating oil. My hon. Friend referred to medically vulnerable people. They are eligible under the existing household support fund and the crisis and resilience fund if they fall into crisis. There is still a lot more that we have to do for people who are medically vulnerable. That is why the Government are taking action to look at how data can be better shared in order to ensure that medically vulnerable people can receive the support they need.

[Graham Stuart (Beverley and Holderness) (Con)]

I welcome the Government coming forward with a proposal, but many of my constituents are facing £600 or £700 increases on bills that are coming immediately at them. The Minister cannot tell us today who exactly will be eligible for help—perhaps he can answer that. He cannot tell us how much they will actually get when they are looking at an increase of £600 or £700 on one bill just to fill up. He did not even seem to know which particular council is going to administer this help. Can he please give some clarity? Otherwise, we are getting the appearance of action and no real relief for most of my constituents.

[Martin McCluskey]

We are providing action quickly, while the previous Government waited nearly 200 days to provide action. The funding will be available from 1 April, as I said. The Minister for Local Government has today written to local authorities to inform them of the additional funding that will be available to them, but, as the right hon. Member will know, the funds are administered by local government. We are providing clear guidance to people and to local authorities that those funds should be available to people using heating oil and LPG.

[Joe Morris (Hexham) (Lab)]

I represent about 13,500 households that are off the grid. I welcome the recognition of the scale of the problem in these communities and getting them proper support. I urge the Minister to ensure that regulation for the heating oil sector is brought forward as quickly and effectively as possible, so that constituents are not ripped off far into the future, and to continue to monitor the situation as it progresses so that further action may be taken if required.

[Martin McCluskey]

I pay tribute to my hon. Friend for all his work to stand up not just for his constituents, but for rural communities more generally. The CMA is investigating heating oil and will come forward with proposals, which we will study to determine whether we need to regulate in this area. But it is clear from what we have heard across the House this evening and in other reports that this market is not working in the way it should.

[Seamus Logan (Aberdeenshire North and Moray East) (SNP)]

More than 130,000 homes in Scotland now face deeper anxiety and financial uncertainty with this paltry intervention from the Government. The reality of this cold winter and spring in the north of Scotland and in the highlands and islands, not least in my constituency, is that there was snow last night. The gritters were out, and some people now face hypothermia as they struggle with the massive increase in costs. With more price increases in the supermarkets, higher fuel costs, rising inflation and growing extreme fuel poverty in Scottish households as this illegal war continues, I ask the Minister whether the Government will now commit to a more robust plan, including further interventions later this year.

[Martin McCluskey]

This is from a representative of a governing party in Scotland that has ditched its fuel poverty targets and, just a few months ago, ditched its heat in buildings Bill, which would have provided support and help to people with leaky buildings.

[Seamus Logan]

What are you going to do about it?

[Martin McCluskey]

I will answer the hon. Gentleman. We have supplied £4.6 million of funding today. He rolls his eyes, but his constituents and many others across Scotland will look at him askance for doing so. This is support for people, and it is now for the Scottish Government to come forward with how they are going to ensure that the money reaches the pockets of people across Scotland.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

It is really good to see the Government prioritising people in distress in rural and coastal areas. My question is slightly separate. It is about listed buildings and conservation area properties, and how those people struggle to insulate their homes because of planning rules. Does the Department have any plans to do something about that?

[Martin McCluskey]

The recent warm homes plan talks about listed buildings. We are working with many heritage organisations to assist with retrofit. I recently visited Saltaire in the constituency of my hon. Friend the Member for Shipley (Anna Dixon) and viewed some excellent examples of historic buildings, which demonstrated that they can be retrofitted to just as high a standard as modern buildings.

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

Although I thank the Minister for the limited amount of support that he has announced today, may I represent to him two of the most vulnerable groups in this regard: the very old and the very young? I ask him to consider them. I have elderly constituents who hardly dare turn on their heating because they do not know whether they can afford it. Will he consider including those groups in the regulations, and if not, will he give local authorities greater discretion to pay out hardship payments in the scheme?

[Martin McCluskey]

First, we should communicate loud and clear today that the energy price cap is going down in April. People’s bills will be reduced by 7%, and it is important that people across the country who are anxious about their bills hear that message. On the hon. Gentleman’s about older and younger constituents, the discretionary element of the crisis and resilience fund allows local authorities to make those choices. It is a person-centred approach to allow them to make choices that are applicable to their local area. I encourage him to have that discussion with his local authority. The guidance would allow it to do that.

[Sam Rushworth (Bishop Auckland) (Lab)]

I thank the Government for their engagement with Back Benchers who represent rural constituencies, and for bringing forward this support so swiftly—in marked contrast to the 200 days it took the Conservatives. However, I share some of the concerns that have echoed around the Chamber about the people who are just about managing, who might not find themselves eligible. If the crisis prolongs, the Government have said that they will keep the situation under review. Will the Minister consider everything being on the table, including, for example, looking at VAT?

--- Later in debate ---

[Martin McCluskey]

I pay tribute to my hon. Friend for his advocacy for his constituents in Bishop Auckland. This is a fast-moving situation. We have come forward today with support because we wanted to assure people that there would be support available as quickly as possible, and that is what we have done. As I have said, we will keep the situation under review.

[Dr Danny Chambers (Winchester) (LD)]

We appreciate the Minister’s statement and the fact that the Government have moved so quickly to provide support. I have received many messages from people in the Meon valley who use heating oil and other types of energy as their main sources of heating. They understand that we cannot control international events, but they are worried that companies are profiteering, with the average price going up from £300 to £640 a tank, or from 63p to £1.40 a litre. Are the Government working at pace to ensure that Ofgem and other regulatory authorities, which do not currently regulate heating oil, will prevent companies from taking advantage of the international situation and making money off older people in particular?

[Martin McCluskey]

The market is clearly not working as it should and needs attention. My hon. Friend the Minister for Energy met the Competition and Markets Authority last week. The CMA took quick action to respond on Saturday in areas that it planned to investigate. I hope that it will come forward with that work quickly, and then we will be able to make a decision about further action.

[Ms Julie Minns (Carlisle) (Lab)]

Carlisle and north Cumbria has around 7,000 off-grid households, so I thank the Minister for his statement, which I know will be welcomed by heating oil and LPG households in my constituency. Will he reassure us that, in tackling the under-regulation left by the previous Government, this Government’s action will regulate the heating oil and LPG markets?

[Martin McCluskey]

The CMA is considering these issues, and we will examine its conclusions carefully. I will write to my hon. Friend about LPG and the CMA’s examination of it, which I hope will provide her with the reassurance that she needs.

[Damian Hinds (East Hampshire) (Con)]

Thousands of households in East Hampshire are off grid. They face much bigger swings in energy prices, and of course when their tank happens to run out is a matter of chance. For them, the statement will be good news, but how will the Government ensure that take-up is maximised among vulnerable and low-income customers, as is done for pension credit? How will the support be communicated to them? For all the questions about how the scheme will be administered, what message should we take back to constituents about what the criteria will be and how much money will be available? It is right that local authorities have discretion, but there has to be some sort of consistency so that people know what to expect. The Minister has talked about guidance being sent to local authorities. Will it include that?

[Martin McCluskey]

I thank the right hon. Member for the constructive way in which he has approached the matter. We need to maximise take-up to ensure that we reach all the people who need support. Local authorities have an important role to play in that; the communications that they provide to their residents will be important. We will also need to work closely with the trade body. With heating oil—more than in many other sectors—there is a relationship between the people who come and fill up the tank and the householder. Those people have a role to play in ensuring that people understand what support is available. The crisis and resilience fund, which this money is topping up, is available from 1 April, and there will be guidelines, as I said. We have been clear that heating oil and LPG are in scope. I take the right hon. Gentleman’s point about consistency, but we must remember that this fund is discretionary for local authorities, so there needs to be some flexibility—largely because local authorities will know how best to serve their local areas.

[Catherine Fookes (Monmouthshire) (Lab)]

I welcome the £3.8 million commitment, which will help Welsh households with rising costs. A 70-year-old woman in my constituency saw a quote for 500 litres of oil rise by £250 in less than a week. Farmers will also be hit hard: they will face increased red diesel prices and an exponential rise in fertiliser costs. Will the Minister share what support may be given to farmers?

[Martin McCluskey]

I welcome my hon. Friend’s comments and her advocacy for her constituents. The £3.8 million being provided to Wales reflects the fact that Wales—especially west Wales—has significant numbers of heating oil-fuelled homes. I will write to her on support for farmers more generally. This is obviously a very fast-moving situation. Our priority at the moment is to ensure that householders get the support that they need for heating oil. As I said, the Minister for Industry is considering issues in the non-domestic sector, which will be relevant to my hon. Friend’s farming constituents.

[Sammy Wilson (East Antrim) (DUP)]

I suppose it was inevitable that the Minister would take the opportunity to bang the drum for his disastrous net zero policy, which has been responsible for giving people in the United Kingdom the highest electricity prices in the whole of Europe. Of course, he talks about the need for energy supply and security. We have our own gas and oil and, as far as I know, it does not have to go through the strait of Hormuz or through a Putin-controlled pipeline, yet we have turned our back on it. I welcome the support for Northern Ireland, even though it amounts to about £34 per household, but I noticed that the Minister said he is working closely with the Minister for the Economy in Northern Ireland. Given that she is still to bring forward a plan to spend the £81 million granted in the Budget last year, will he ensure that he keeps her feet to the fire so that people in Northern Ireland can receive the support that they need now, not next winter?

[Martin McCluskey]

I had a constructive conversation with Minister Archibald this afternoon about the support on offer, and I am confident that the Northern Ireland Executive will work at pace to ensure that it is delivered to people across Northern Ireland. The right hon. Gentleman mentions net zero. It is important to remember two things: first, more North sea extraction would not affect energy prices for people in this country, and secondly, the long-term route to lower prices is not through exposing us further to fossil fuels. That exposure—not net zero—is why we have some of the higher prices in Europe. More exposure, which is his suggestion, would just increase our prices and our vulnerability, including for people in Northern Ireland.

[Alistair Strathern (Hitchin) (Lab)]

Having grown up in a household that relied on heating oil, I know how overlooked off-grid rural communities can feel. They were overlooked by the previous Government, who did not include them in energy price support for 200 days, and they have been overlooked by a regulatory framework that does not give them the same protections offered to other homeowners. I welcome this announcement of support, in which the Government have acknowledged that those households deserve far better. However, I have seen quite exploitative practices from oil companies in my constituency recently, so can we ensure that we are not shying away from the regulatory reforms that are needed for the longer term?

[Martin McCluskey]

Many hon. Members have highlighted such cases. The heating oil market is clearly not working in the way that it is meant to, which is why we are focusing on what we need to do in terms of regulation. As I have said, the CMA is considering particular aspects of the market. We will study its conclusions and come forward with proposals.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

How was the sum of money that the Minister announced arrived at? Was there any reference to the increased tax receipts that the Treasury will see as a result of hikes in oil prices? Will he lay out the criteria on which the money will be awarded? Without such criteria, he cannot possibly approach rationally the amount of money that he will be giving people in order to help them. Finally, how are my constituents to spot the price manipulation that he has asked them to report?

[Martin McCluskey]

On the right hon. Gentleman’s final question, his constituents should send any cases of potential price manipulation through the CMA, which will investigate such cases. As for how allocations have been arrived at, that is a combination of the number of heating oil households in individual areas and deprivation figures. It will be for local authorities to determine how the scheme works. As I have said, we have provided guidance to local authorities to ensure that households that use heating oil and LPG receive the support that they need.

[Leigh Ingham (Stafford) (Lab)]

I thank the Minister for his statement and for the rapid action he has outlined. About 7% of households in my constituency are oil fuelled. Families in Gnosall, Norton and Haughton have told me that they had agreements with an oil contractor for deliveries, which were supposed to take place last week but were cancelled as the conflict escalated. Now, the price has more than doubled. Will the Minister tell me what rapid action is being taken to stop companies price gouging in such a way?

[Martin McCluskey]

I will say a couple of things in response to that. We have been in constant dialogue with industry bodies to communicate clearly to them what we would see as inappropriate action and pricing. We are moving at pace with the CMA and have asked it to look at this market because it is clearly not functioning. Absolutely none of our constituents should have to face the kind of situation that my hon. Friend describes.

[Manuela Perteghella (Stratford-on-Avon) (LD)]

Nearly 13,000 households are off-grid in my constituency, including my home. It is a wild west out there; prices have doubled in just a few weeks, and many of my constituents are not even able to pay for the minimum 500-litre orders required by the providers. Does the Minister agree it would be far quicker and simpler for the Government to provide relief through a VAT holiday on heating oil and LPG? That would ensure that support reaches every household immediately, rather than relying on councils to distribute limited discretionary funds.

[Martin McCluskey]

Our priority has been to ensure that support reaches people as quickly as possible. That is why we have come forward with this proposal today. As I said in response to previous questions, we will keep the situation under review as the situation in the middle east progresses. The CMA is looking at a number of areas before it makes recommendations that might lead to regulation, and we will study those carefully. One of those is whether the issue of minimum orders needs to be examined more closely. The hon. Lady has my reassurance that we are looking at this issue, and the CMA will come forward with proposals.

[Terry Jermy (South West Norfolk) (Lab)]

More than 22,000 households in my constituency rely on heating oil. Dozens of constituents have contacted me over the last week, and they are worried sick, so I very much welcome this announcement and the speed with which the Government have made it. This situation has exposed the fact that rural communities are uniquely vulnerable to global energy shocks. May I urge the Minister to do all he can to prioritise better regulation and to look at how rural communities can benefit from the warm homes plan and transition to better insulation and renewable technology in a way that they were not able to do under the previous Government?

[Martin McCluskey]

I thank my hon. Friend for his comments and for everything that he is doing to advocate for the many constituents he has who use heating oil. As he said, we need to move forward with the CMA to examine what regulation might be required. He will have seen that the warm homes plan highlights rural households and low-income households as an area of priority. He may be interested to know that around 50% of grants from the boiler upgrade scheme are going to rural homes, showing the demand that exists in constituencies such as his.

[Ben Obese-Jecty (Huntingdon) (Con)]

Daisy in Old Weston has seen her quote for 500 litres of heating oil leap from £324 to £868. Lee has a 1,400 litre tank; her quote from before Christmas was £600, and it is now nearly £2,000. Those are huge price spikes, and they are having a massive impact. Will the Minister outline how the crisis and resilience fund will be allocated to Cambridgeshire county council? What is the total amount that it is likely to receive? Is there any cap on how much can be given out to individual households? Is there any cap on how much Cambridgeshire county council can give out in total, or will this be done on a first come, first served basis?

--- Later in debate ---

[Martin McCluskey]

The situation that the hon. Gentleman describes for his constituents is clearly intolerable. That is why we are looking with the CMA at the case for regulation in this market—it is clearly not working in the way that it should. On the crisis and resilience fund, more than £800 million has already been allocated through the spending review, and today we have added just over £50 million to the fund. This funding will be made at the discretion of local authorities, and we have written today to leaders of local authorities detailing the additional funding that will be available to them.

[Rebecca Long Bailey (Salford) (Lab)]

I very much welcome the Minister’s comments today, but he will understand the huge level of concern regarding the prospect of profiteering in not just the heating sector, but the wider energy sector, and its impact on the grocery sector at large. Indeed, the National Farmers Union has reported in recent days that it is concerned about potential profiteering in the fuel sector and the fertiliser sector. Will the Minister outline what action the Government are taking beyond instigating reviews at the level of the CMA to ensure that our constituents are protected from any profiteering?

[Martin McCluskey]

This Government will not stand for any profiteering in the system. That is why the Chancellor and the Secretary of State brought the petrol retailers in last week, for example, to make that abundantly clear to them. We have also made it abundantly clear to the representatives of the heating oil industry. When it comes to the electricity and gas suppliers, we took action through the Budget last year to remove costs from energy bills and reduce energy costs by 7% from April. We will cut no corners in holding companies to account where we think there is any sense of profiteering or manipulation of price. That is what the CMA is examining for us, and that is why we will examine what it comes forward with for the heating oil industry and decide whether there is a need for regulation.

[Several hon. Members rose—]

[Ben Lake (Ceredigion Preseli) (PC)]

I welcome today’s announcement and the proposals. They potentially offer a relief of 20% or so to the households in Wales that are off-grid, including 72% of households in my constituency. The Minister will appreciate that households will be anxious to understand what level of support they stand to receive. Was there a per-household level of payment in mind when the Government came up with these calculations? Given that LPG households will be entitled to support, can I also ask why heating oil data was used to calculate the £3.8 million allocation for Wales?

[Martin McCluskey]

As the hon. Gentleman said, £3.8 million has been allocated to Wales. It will be for the Welsh Government to design the scheme that they will use to roll that out; it may be through existing schemes or through something different, but that is a decision for them. In all this, our priority has been to work at speed. We do not want to leave people in a situation without any support, which is why we have come forward with this proposal, just a few weeks after the initial stages of this conflict in the middle east. That is our priority. As I said, we will keep this issue under review, and we will come forward with more proposals if necessary.

[Katrina Murray (Cumbernauld and Kirkintilloch) (Lab)]

I welcome the Minister’s statement. Some of the most vulnerable people in my constituency live in the village of Banton, which is not on the gas grid. However, the rest of my constituency would be considered urban. Will the Minister make representations to the Scottish Government so that they do not just look at rurality when deciding how they are going to allocate this funding?

[Martin McCluskey]

My hon. Friend makes an important point, which I will be sure to raise in future discussions with Scottish Government Ministers.

[Gideon Amos (Taunton and Wellington) (LD)]

Residents of Curland and Hatch Beauchamp are among the 9,000 off-grid households in my constituency, and they have contacted me about the heating oil question. Given that prices have gone up so greatly, they will welcome the Government’s move, however small, against the soaring prices caused by Trump’s illegal and unprincipled war. However, given that the help works out at only £35 per house, would it not be better to have a VAT holiday and a permanent price cap so that these customers are not second-class energy consumers?

[Martin McCluskey]

Not every household will decide to fill up now, at the point when the prices are so high. In addition, we have made it clear that this money is going through the crisis and resilience fund, which means that it is focused on low-income people, so we need to be careful not to imply that the funding is at the level that the hon. Gentleman describes. We are making sure that support is getting to people quickly, and that is the absolutely priority.

[Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)]

I warmly welcome the Minister’s confirmation that the UK Government have provided the Scottish Government with £4.6 million to ensure that the most vulnerable households in parts of my constituency, like Auchtertool and Kingseat, are shielded against the increases in the price of heating oil caused by war in the middle east. Does he agree that it is up to the Scottish Government to act very rapidly to ensure that the most vulnerable households in my constituency get the support that they need?

[Martin McCluskey]

I completely agree with my hon. Friend. We must ensure that support is available in all parts of the UK as quickly as possible. In England, it will be available through the crisis and resilience fund from 1 April.

[Jim Allister (North Antrim) (TUV)]

In my constituency, an oil refill that was costing less than £500 costs well over £1,000 today, so I am rather underwhelmed by a package that offers a household £35 pro rata. How does the £53 million for the whole package compare with the increased VAT tax take from the rise in the price of heating oil? I suspect that it does not compare favourably. Would not the fairer—

--- Later in debate ---

[Jim Allister]

Would the fairer approach not have been to suspend the 5% VAT on home heating oil? Would that not have been fairer to everyone?

[Martin McCluskey]

My priority and the priority of the Government has been to ensure that support gets to people as quickly as possible, which is what we are doing today. The pro rata suggestion that the hon. and learned Gentleman has just made misses the fact that not everyone will fill up their tank during this period when prices are high. We do not know where the situation in the middle east is going, and we do not know what prices are going to be like two, three, four or five weeks from now. However, as I have said in response to other hon. Members, we will review the situation as it progresses.

[Jon Pearce (High Peak) (Lab)]

The Minister’s statement will be hugely welcome in High Peak, where thousands of households are reliant on heating oil. Many have told me that the prices they are being charged have more than doubled. These households have been overlooked for too long. Will the Minister set out how the sector can be better regulated, to make sure that these households get a better deal going forwards?

[Martin McCluskey]

I thank my hon. Friend for his continued advocacy for his constituents in High Peak. The CMA is investigating areas of policy around the heating oil market and will come forward with suggestions. We will examine those suggestions in detail to determine whether or not regulation is required in the sector. However, it is clear from points that my hon. Friend and others have made that this market is not operating in the way that it should.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister very much for his announcement—the £17 million for Northern Ireland, as part of the £53 million package, is welcome. That recognition and funding is important, given the price of home heating oil. Some 62% of people across Northern Ireland have heating oil, including almost 80% of people in my part of the Ards peninsula—in my constituency, where I live—so it is very important that we get this right. Will the Minister commit to urgently engaging with his counterparts in Northern Ireland? My people want to see the money sooner rather than later.

[Martin McCluskey]

This funding has to work for people in Northern Ireland, including in the hon. Gentleman’s constituency of Strangford. That is why today, I have had another call—the second over the past few days—with Minister Archibald in the Northern Ireland Executive, and it is why I will continue to engage with the Northern Ireland Executive over the next few weeks.

[Mary Kelly Foy (City of Durham) (Lab)]

In villages like Waterhouses and Quebec in Durham, many people use heating oil to heat their homes and their water. I have been contacted by very distressed constituents who tried to order their usual supply of heating oil, only to find that prices had soared so irrationally that they cancelled their order. This profiteering is completely unacceptable, so can the Minister restate the actions that the Government are taking to stop these heating oil companies blatantly ripping off my constituents, and can he tell me the best mechanism for reporting such behaviour?

[Martin McCluskey]

Again, the points that my hon. Friend makes and the cases she brings to the attention of the House demonstrate that this market is clearly not working in the way that it should. I encourage her to send any of these cases to the CMA, so that it can consider them as part of its work.

[Amanda Hack (North West Leicestershire) (Lab)]

I welcome the speed with which this Government have listened and responded to those households whose homes are heated by heating oil. I also thank the ministerial team for their engagement with MPs across the House. As many people on heating oil in North West Leicestershire may not previously have accessed support via the household support fund, how will the Minister ensure that the support gets to the individuals who need it?

[Martin McCluskey]

The local authorities have a role to play—as do all of us in this House—in communicating clearly that support is available. We need to make sure our constituents know that support for heating oil and LPG is now part of the crisis and resilience fund, and that it will be available from 1 April.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

We have seen oil prices surge over the past two weeks, and the targeted Government support announced today for low-income rural households that are reliant on heating oil, including many of my constituents, will help. Can I ask specifically about the distribution of the support? What are the criteria for a vulnerable heating oil customer, and what support will there be for those who do not need to fill up now, but will in the medium to near term?

[Martin McCluskey]

On my hon. Friend’s final point about the medium term, we are keeping this issue under constant review, because the situation is moving so quickly. In his case, it will be for the Welsh Government to set out how they will distribute these funds; that may be through existing schemes, or through a new scheme.

[Perran Moon (Camborne and Redruth) (Lab)]

Although I warmly welcome this support for the poorest rural homes, hydrotreated vegetable oil prices have remained relatively stable throughout the fortnight, so as well as securing ample production of HVO through sustainable aviation fuel refining, can I once again urge the Minister to ensure that the barriers and disincentives that prevent tens of thousands of rural residents from switching from kerosene to HVO are cleared as a matter of urgency?

[Martin McCluskey]

As my hon. Friend knows, a consultation has recently concluded, and we will come forward with a response in due course.

[Markus Campbell-Savours (Penrith and Solway) (Lab)]

I appreciate the speed at which the Government are working, and understand that local authorities will have a role in how the money is distributed. However, in the absence of detail, many people are doing a back-of-a-fag-packet calculation. Can the Minister reassure them that we are committing enough money to make a real difference, and will he commit to meeting me to discuss how we support the 14,715 households in Penwith and Solway who do not benefit from being on the mains gas grid?

[Martin McCluskey]

The Government believe that this funding should be sufficient for those low-income households that are at acute risk of imminently losing access to their heating and hot water. As I have said in response to other questions, we will keep this issue under review and come forward with responses in the House at a later stage.

[Julia Buckley (Shrewsbury) (Lab)]

The 6,700 households in my constituency that are wholly reliant on heating oil have been very anxious following the impact of the war. They tell me that the impact on oil supplies has doubled and—in one case—trebled the price of heating oil, and some suppliers are no longer offering delivery dates. Elderly residents are wearing coats and gloves indoors to ration their supply. Over the past week, Ministers have taken the time to listen to rural MPs and have set out the scale of the issues we face, so let me place on record my gratitude for the additional £758,000 that will go to the worst-affected households across Shropshire. Can the Minister confirm that this money will be available from as early as 1 April?

[Martin McCluskey]

I thank my hon. Friend for the constructive way in which she and other MPs representing rural constituencies have engaged with this process. I can confirm that the money will be available from 1 April.

[Sean Woodcock (Banbury) (Lab)]

I am grateful to the Minister for his statement. With over 5,000 properties off the grid in the Banbury constituency, I welcome this announcement. Can I add my voice to the others we have heard from around the Chamber in asking that this Government to do what the previous Government failed to do: finally tackle the lack of regulation and proper accountability in the sector?

[Martin McCluskey]

We inherited a number of areas in the energy sector that were unregulated. This is one of them, which is why we are putting focusing so much on it, and we will study the CMA’s conclusions when they come forward.

[Euan Stainbank (Falkirk) (Lab)]

It is imperative that this support reaches the most vulnerable heating oil households, such as those in the Braes villages in my constituency, who have seen astronomical price spikes. Can the Minister confirm whether the Scottish Government have yet signalled that they will administer this Government’s funding for Scotland’s vulnerable heating oil households nationally or via local authorities—and if they have not, will he ask John Swinney to get a move on?

[Martin McCluskey]

I commend my hon. Friend for the work he is doing for his constituents in Falkirk. As I mentioned earlier, the Minister for Energy met the Scottish Government last week. I will be having further discussions, and will pass on those sentiments to Scottish Government Ministers.

[Paul Waugh (Rochdale) (Lab/Co-op)]

My constituents, Barrie and Gill Fulton, live in a rural part of Littleborough, and therefore rely on LPG. Both Barrie and Gill have cancer, and they are worried sick about the price spike that they are seeing at the moment. Can my hon. Friend reassure me that the scheme will be flexible enough to take into account the needs of families like the Fultons? Does he also think there is a certain irony in Opposition Members complaining about the pain felt by their constituents as a result of a war that they directly support?

[Martin McCluskey]

I thank my hon. Friend for bringing the case of Barrie and Gill Fulton to the attention of the House. I can confirm that the guidelines stipulate heating oil and LPG, so they will be covered; determining who is eligible will be at the discretion of local authorities, but I hope my hon. Friend’s constituents can find some relief in that information.

[Chris Kane (Stirling and Strathallan) (Lab)]

Many households in the rural part of my constituency—including in Carron valley, whose community council I met on Friday—rely on heating oil and live in older housing stock that can be difficult to make energy-efficient. Many of those communities also have an older population. Does the Minister recognise the particular challenges this creates, and will the Government consider future measures that better reflect the nature of rural housing?

[Martin McCluskey]

In our warm homes plan, we came forward with proposals for England. The Scottish Government, unfortunately, have ditched their heat in buildings Bill, which would have provided some relief to my hon. Friend’s constituents. I hope that the Scottish Government come forward with an alternative soon.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

In the rural parts of my constituency, one in 20 houses relies on heating oil. One of my constituents told me that his bill had gone up by 270%, while other constituents have had their deliveries cancelled. I welcome the £53 million of investment. I know it will be targeted through local authorities, but can the Minister give my constituents an indication of when that money will filter through to their bank accounts?

[Martin McCluskey]

The additional top-up funds will be available through the crisis and resilience fund from 1 April. What I say to my hon. Friend’s constituents and those of all other hon. Members is that they should contact their local authorities today if there is an issue so that, either now or after 1 April, they will be able to take advantage of that support.

[Madam Deputy Speaker (Caroline Nokes)]

I thank the Minister for his answers this evening.

Warm Home Discount Cost Recovery Consultation: Government Response

Martin McCluskey Excerpts

Thursday 12th February 2026 Written Statements

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

I am today announcing the publication of the Government’s response to the December 2025 consultation on warm home discount cost recovery. The response confirms our intention that the costs of the warm home discount should be recovered from the unit rate for electricity and gas from 1 April 2026, subject to changes to the price cap methodology that Ofgem has consulted on separately.

Since its inception in 2011, the warm home discount has delivered over £4.53 billion in support across Great Britain, primarily benefiting those in or at risk of fuel poverty. It remains a key policy in the Government’s programme to tackle fuel poverty and reduce energy costs for low-income households, primarily through the provision of £150 energy bill rebates each winter, funded through a levy on domestic gas and electricity customers.

This Government recognise the pressure on the cost of living. Tackling fuel poverty and reducing energy bills remain priorities. At the Budget, the Government announced measures expected to take an average of £150 off household energy bills from April 2026. Moving warm home discount cost recovery to the unit rate complements these wider steps to improve fairness and affordability as it means that those who use less energy pay less towards the policy costs. We have also published the warm homes plan and the fuel poverty strategy for England, which together set a pathway to lift up to 1 million households out of fuel poverty by 2030.

Between 8 December 2025 and 6 January 2026, we received 778 responses from individuals, consumer and advocacy groups, energy suppliers and other stakeholders. Overall, there was strong support for moving cost recovery away from the standing charge and on to the unit rate on fairness grounds for low-use households.

Having considered the evidence, the Government have decided that unit rate recovery will proceed from April 2026. This approach links contributions more closely to actual consumption and is fairer for lower-use customers. We recognise concerns about households with unavoidably high energy needs, such as those using electric heating or medical equipment. When taken together with wider bill changes announced at the Budget, the net impact on typical consumers is expected to be a reduction in costs. For example, modelling suggests that a typical high-usage, electrically heated household might save £395 annually when the switch to unit rates is combined with the measures announced at the Budget.

To support accurate and fair delivery, we will update energy supplier reconciliation arrangements so that their obligations are settled against energy volumes supplied. We will also introduce an industry-wide feedback mechanism so that any aggregate under or over-recovery arising from differences between forecast and actual demand in one scheme year is corrected in the following year. As with this scheme year, we also intend to continue with earlier interim reconciliation for the next scheme year and will keep the arrangements under review, working with Ofgem and engaging industry as needed.

The consultation also sought views on placing a greater share of warm home discount recovery on gas to support wider rebalancing between gas and electricity. We are not proceeding with this at this stage because of concerns about potential distributional impacts on low-income, gas-reliant households, particularly in colder or less efficient homes.

Subject to Ofgem’s related price cap methodology changes and parliamentary approval, the Department for Energy Security and Net Zero will lay the Warm Home Discount (Reconciliation) Regulations 2026 later this year. We will work with Ofgem and energy suppliers to support a smooth transition from 1 April 2026.

[HCWS1336]

Oral Answers to Questions

Martin McCluskey Excerpts

Tuesday 10th February 2026 Commons Chamber

[Warinder Juss (Wolverhampton West) (Lab)]

7. What estimate he has made of the potential impact of Great British Energy on energy bills for public services.

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

Great British Energy’s mission is to power Britain with clean, secure and home-grown energy. It has already started that work, with Great British Energy and the Government funding around 250 school and 260 hospital solar installations, including at Rakegate primary school and Ormiston NEW Academy in my hon. Friend’s constituency.

[Warinder Juss]

In my constituency, almost one in five households have been living in fuel poverty, struggling to heat their homes this winter. I welcome the Government’s commitment to lifting 1 million more households out of fuel poverty by 2030, which will have a significant impact on my constituents. Will the Minister please outline what other tangible changes my constituents can expect to see over the next year thanks to GB Energy, so that by the time we come to next winter they can feel comfortable that they can now afford to heat their homes?

[Martin McCluskey]

I thank my hon. Friend for that question. I know that he is focused, as I am, on reducing energy bills for his constituents and people across the country. I have already spoken about the extensive investment in solar not just in his constituency but across the country. People in Wolverhampton and across the country will also be benefiting from our action to reduce energy costs by an average of £150 this April. That is in addition to continuing the warm home discount for nearly 6 million eligible households this year.

[Mr Gregory Campbell (East Londonderry) (DUP)]

There have been numerous references to the cost of energy and reducing that cost in the United Kingdom. Has any assessment been made by the Minister or the Department of the comments made by the International Energy Agency in the past few days, which seem to indicate we have one of the highest prices in the western world?

[Martin McCluskey]

I think where the IEA and I would agree is that we need to get off the rollercoaster of fossil fuels and ensure we are investing in clean home-grown energy that people across the country can take advantage of to lower their bills.

[Dame Chi Onwurah (Newcastle upon Tyne Central and West) (Lab)]

8. What steps he is taking to support the green energy sector in the north-east.

--- Later in debate ---

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

12. What steps he is taking to help reduce consumer energy prices in Scotland.

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

This Government’s actions mean lower bills for people across Scotland and lower levels of fuel poverty; in April, because of the Government’s actions, households across Scotland will see an average of £150 of costs removed from their energy bills. Just last week, we announced the extension of the warm home discount to 2031, meaning £92 million of support for some of the most vulnerable people across Scotland every year into the next decade.

[Dave Doogan]

The energy market in Scotland operates in surplus in both generation and transmission, whereas the energy market in England operates in shortage in both generation and transmission. Unfortunately, that means that in a GB energy market, Scotland gets sucked in to subsidising energy costs for English consumers. Over and above that, Energy UK has made it clear that there will be no meaningful reduction in energy bills until some indeterminate point in the 2030s. Will the Minister recommit—just before the Scottish elections—to energy bills in Scotland being £300 lower in 2029 than in 2024?

[Martin McCluskey]

Bills are coming down, and yes, I will recommit to that. [Interruption.] If the hon. Gentleman does not want to listen to me about the impact of our policies, he might look at the Scottish Government’s own modelling of the £150 off energy bills, which says that the number of people in fuel poverty in Scotland will reduce by 9% and the number in extreme fuel poverty will reduce by 12.5% this April. That is because of this Government’s actions, not because of anything the hon. Gentleman or his colleagues are doing.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

It was good to see you walking in today, Mr Speaker.

I welcome the publication of the local power plan, which will be keenly read in my constituency—the heart of the Atlantic—where communities are taking their share in the wealth of wind. To renew and expand community energy, we need to get connected to the grid. I welcome what the local power plan has to say about setting up tailored support for communities, but there must be priority support from Ofgem, the grid operators and this Government to ensure that communities benefit from the wealth of wind.

[Martin McCluskey]

I know that my hon. Friend is a real champion for local community power in Na h-Eileanan an Iar. I am sure my hon. Friend the Minister for Energy will have lots to say on the matter soon on his visit to the Western Isles.

[Sir Mark Hendrick (Preston) (Lab/Co-op)]

13. What estimate he has made of the potential impact of the contracts for difference clean industry bonus on the number of clean energy jobs.

--- Later in debate ---

[Cat Eccles (Stourbridge) (Lab)]

14. What steps his Department is taking to help ensure the accuracy of small businesses’ energy bills.

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

One of the best ways to ensure accurate billing is by using a smart meter, which automatically records energy use in every half-hour period, allowing bills based on actual rather than estimated usage. That is why more than two thirds of non-domestic premises are already using a smart meter.

[Cat Eccles]

Small businesses across my constituency have been mis-sold commercial energy contracts by brokers. A business in Lye was recently locked into a three-year contract in which it found itself paying more than double the market rate. An independent café in the Merry Hill centre recently had to close due to the £1,500 a month in energy bills that it was forced to pay. Will the Government strengthen the law to protect small businesses against unscrupulous energy brokers and consider introducing a cap on business tariffs?

[Martin McCluskey]

I am sorry to hear about the experience of businesses in my hon. Friend’s constituency. The short answer to her question is yes, we will strengthen the law in this area. Rogue energy brokers have been allowed to use predatory sales tactics for too long to take advantage of customers. That is why, once parliamentary time allows, we will be introducing new measures to stamp out that exploitation.

[Mr Jonathan Brash (Hartlepool) (Lab)]

15. What recent progress he has made on developing alternative routes to market for new nuclear projects.

--- Later in debate ---

[Mr Luke Charters (York Outer) (Lab)]

16. What assessment he has made of the potential impact of the extension of the warm home discount on living standards.

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

I am proud that the Government have extended the warm home discount to an extra 2.7 million households, taking the total to around 6 million. Last week, we announced that the scheme would continue supporting households for a further five years to 2031. This will make a vital difference to so many families this winter, including an additional 190,000 households in Yorkshire and the Humber.

[Mr Charters]

I will never forget my mum renting a house in York with ancient heating, freezing rooms and an evil prepayment meter that drained her finances. In York, over a third of fuel-poor households rent privately. What is the Secretary of State doing to ensure that the warm home discount reaches them and ends the unfair penalty paid by many simply for renting?

[Martin McCluskey]

The experience that my hon. Friend outlines is still all too common in our country, and I know that he continues to raise this issue on behalf of all his constituents. The warm home discount is available to eligible private renting households on prepayment meters, and through the warm homes plan we are taking significant action to increase the minimum energy efficiency standards for the private rental sector, so that every private renter in my hon. Friend’s constituency and elsewhere benefits from a warm home that is cheaper to heat.

[Gregory Stafford (Farnham and Bordon) (Con)]

17. What assessment his Department has made of the potential impact of energy infrastructure-related technologies imported from China on security.

--- Later in debate ---

[Vikki Slade (Mid Dorset and North Poole) (LD)]

T7. Much of Dorset is blessed with solid-wall, thatched cottages—you must visit, Mr Speaker. That includes our National Trust village of Shapwick, where Slate cottage sat empty for two years because it would cost £100,000 to bring it up to the minimum energy efficiency standards, and the National Trust just could not do it. It has now sold the cottage, which is a real loss to the community. What will the Minister do to help landlords such as the National Trust to resolve this problem?

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

We are working closely with heritage organisations to tackle precisely that problem. The hon. Lady will see in the warm homes plan that there is specific advise about retrofitting historic buildings. [Interruption.] Although they are not in her constituency, I will be visiting some projects soon.

[Lloyd Hatton (South Dorset) (Lab)]

Morwind recently received funding to conduct an important feasibility study for a major offshore wind hub at Portland. If built, the hub would be a key part of the west country’s manufacturing supply chain, and it would create hundreds of well-paid green jobs for local people. Will the Minister work with Morwind and me to deliver the hub at pace, and will he come to Portland to meet the key players and get the ball rolling?

Consumer Energy Bills: Government Support

Martin McCluskey Excerpts

Tuesday 27th January 2026 Westminster Hall

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

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

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

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

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

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

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

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

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

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

[Sarah Gibson]

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

[Martin McCluskey]

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

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

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

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

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

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

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

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

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

Question put and agreed to.

Heat Networks (Mark Framework) (Great Britain) Regulations 2025

Martin McCluskey Excerpts

Tuesday 27th January 2026 Written Statements

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

Today I am announcing the commencement of heat network regulation.

Remaining sections of the Heat Network (Market Framework) (Great Britain) Regulations 2025, as amended, will come into effect, introducing protections for both existing and future heat network consumers as we seek to grow the sector. These protections build on the introduction of statutory advice and advocacy through Citizens Advice and Consumer Scotland and statutory redress through the Energy Ombudsman, introduced from April 2025.

Heat networks are a decentralised energy distribution technology, which circulates heating, cooling and hot water from central sources to multiple points of use. The scale of these networks can vary significantly, from single building, communal networks to multiple building district networks. Heat network consumers have not, until now, enjoyed similar regulatory protections to those in gas and electricity markets. This unregulated state has led to a large variation in consumer experiences, including limited transparency on pricing. Where there are no consistent rules on prices, supplier behaviour or technical operation, this has meant some consumers can experience unfair high prices, poor customer service and frequent outages with limited routes of redress.

That is why the Government have taken steps to regulate the market, acting on recommendations from the Competition and Markets Authority and appointing Ofgem to act as the heat network regulator. Ofgem will operate an authorisation regime, which heat networks are bound to comply with to maintain their right to operate in the market. Ofgem’s powers will enable it to collect information from heat suppliers that will help it to assess whether regulations are proportionate and to take decisive action if necessary to address regulatory non-compliance.

Existing heat networks have been automatically deemed as holding an authorisation until the end of the transitional period on 27 January 2027. These heat networks, and any heat networks that commence operation from now until the end of the transitional period, will need to submit a lighter-touch registration to Ofgem before the transitional period ends.

Ofgem authorisation conditions include rules on how prices are charged, requiring that prices are clearly explained, bills are transparent and that prices charged are fair. Once Ofgem has collected a full year’s worth of sector data, it will set benchmarks of acceptable prices for different network characteristics, which will be a basis for more systematic action to tackle examples of unfair high pricing. Ofgem will also have powers to introduce guaranteed standards of performance once market data becomes available. This will set out the standards of service that heat networks will be expected to provide to consumers, and networks will be required to pay compensation when these standards are not met. In addition, we have published a consultation on proposals for minimum mandatory technical standards to help drive improved heat networks’ efficiency and performance.

The regime that is commencing today is set out through the first comprehensive utility regulations in the heat network sector’s history. We will monitor the market closely, working with Ofgem and other statutory partners to ensure that the regulatory regime works effectively and that it is fit for the purpose of protecting heat consumers.

[HCWS1274]

Warm Homes Plan and Fuel Poverty Strategy

Martin McCluskey Excerpts

Wednesday 21st January 2026 Written Statements

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

Today, the Government are publishing the warm homes plan, alongside the fuel poverty strategy for England.

The warm homes plan—the biggest public investment in home upgrades in British history, delivering total public investment of £15 billion—will upgrade Britain’s homes to tackle the cost of living crisis and help lift 1 million households out of fuel poverty. The plan has three key pillars:

Low-income offer

At the Budget, the Chancellor took an average of £150 of costs off energy bills from April 2026, cutting the number of those needing to spend more than 10% of their income on energy bills by over a million. Building on this, the warm homes plan involves £5 billion of public investment to directly deliver home upgrades for low-income families—the biggest public investment in tackling fuel poverty in our history. Low-income households will receive, free of charge, packages of upgrades, depending on which technologies are most suitable for their homes. We are also today publishing an updated fuel poverty strategy for England, which sets out our plan to lift 1 million households out of fuel poverty by 2030.

An offer for everyone

The warm homes plan ensures that the benefits of new technologies like heat pumps, solar or batteries are available to families of every income. We are setting aside £2 billion to subsidise zero and low-interest loans for solar panels, batteries and other technologies, with a further £3 billion available for loans and investments in home upgrades over the coming years through our warm homes fund.

The Government are increasing investment in the boiler upgrade scheme every year to 2030 and supporting a wider range of technologies, including heat batteries or air-to-air heat pumps that can also cool homes in the summer. We are working with industry to simplify heat pump installation and to reduce install times. We are also launching a new warm homes agency to support consumers.

New protections for renters

There are 1.6 million children living in private accommodation who suffer from cold, damp or mould. The Government believe that if you rent a home, private or social, a landlord has a responsibility to ensure that it is safe, warm and affordable. We are introducing new measures which, by 2030, require private landlords to upgrade their properties to meet minimum standards of energy efficiency in a fair way over several years.

The warm homes plan is a landmark plan to cut energy bills for millions of families, reduce fuel poverty and create good jobs, while doing the right thing for current and future generations.

[HCWS1264]

Energy Infrastructure Planning: North Falls Offshore Wind Farm

Martin McCluskey Excerpts

Thursday 15th January 2026 Written Statements

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

This statement concerns an application for development consent made under the Planning Act 2008 by North Falls Offshore Wind Farm Ltd for an offshore wind farm with up to 57 wind turbines and up to two offshore substation platforms, and up to one offshore converter platform, located off the East Anglian coastline in the southern North sea.

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 North Falls Offshore Wind Farm proposed development is 28 January 2026.

I have decided to set a new statutory deadline of 28 April 2026. This is to allow time to request further information that was not available for consideration during the examination period, and to give all interested parties the opportunity to review and comment on such information. Although my preference would be not to amend the deadline, I am clear that applications for consent for energy projects submitted under the Planning Act 2008 must meet the necessary standards.

The decision to set the new deadline for this application is without prejudice to the decision on whether to grant or refuse development consent.

[HCWS1246]

Factored Energy Arrangements: Pricing

Martin McCluskey Excerpts

Wednesday 14th January 2026 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Stuart. I congratulate the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) on securing this debate and giving Members across the House a rare and, I am sure, welcome opportunity to discuss factoring arrangements in Scotland.

The Government recognise that households in factored buildings and their equivalents face more complexity in securing the energy they need than typical households. I hope to address the six points that the hon. Member made at the end of his speech, but if there are any that he would like to discuss further with me, I will be more than happy to do so after the debate.

Factors and other property managers have an important role to play in ensuring that they secure the best-value energy contract for their building. When looking to renew their energy contracts, they should be actively comparing quotes across the non-domestic market and considering available customer service data such as Citizens Advice’s energy supplier performance league table.

Small tenements have different needs for communal area pricing from those of a large council complex, for example. Although the existing approach has generally benefited households and offered protection from unfair reselling, some households can be exposed to high prices, as we have heard from the hon. Member and others. The Government are committed to ensuring that our approach to these issues delivers the best outcomes for our citizens as our energy system evolves.

[Tracy Gilbert (Edinburgh North and Leith) (Lab)]

I welcome this debate and congratulate the hon. Member for Moray West, Nairn and Strathspey (Graham Leadbitter) on securing it. I am grateful that the Minister recently took the time to visit my constituency and meet residents who had been battling with their factors. They manage a heat network but are all too often left without heat and hot water, which happened again over the Christmas period. My constituents were very grateful to hear the pace at which the Minister is working to put in place regulations and projects that will protect residents like them. Does he agree that we need to see action from the Scottish Government to redress the balance of power between factors, companies and residents?

[Martin McCluskey]

I thank my hon. Friend for all her work to advocate on behalf of her constituents—I think it was at Saltire Square in Granton, and my hon. Friend the Member for Edinburgh East and Musselburgh (Chris Murray) is doing the same with a heat network in Greendykes. At that meeting, we heard how important it is that we get on top of this. The Ofgem regulation kicks in on 27 January, and we will be looking to Ofgem to implement it as quickly as possible. I agree with my hon. Friend the Member for Edinburgh North and Leith (Tracy Gilbert) that there are more actions that other Governments across the UK can take in this space. I will turn to that point in a moment.

As I say, the Government are committed to ensuring that our approach to these issues delivers the best outcomes for our citizens as our energy system evolves. Ofgem keeps all the standard licence conditions under review to make sure that they are working in the best interests of consumers. As part of that, Ofgem will look again at standard licence condition 6 to ensure that the definitions continue to meet the needs of consumers and the evolving energy market.

Before I turn in detail to other energy policy issues, let me briefly say something about factoring as a whole. It is a devolved responsibility, and it is for the Scottish Government to make decisions relating to it. However, there is widespread interest in factoring reform in Scotland, and there is clearly an interaction between the effectiveness of the factor and our ability to provide the best deal in energy, and many other areas, for the consumer.

There is clearly a need, and there are widespread calls, for factoring reform in Scotland. There have been no major reforms to factoring since 2011, when my hon. Friend the Member for Glasgow West (Patricia Ferguson), in her time as a Member of the Scottish Parliament, took a Member’s Bill through Holyrood. The Scottish Government have recently rejected amendments to housing legislation that would have increased transparency in charging and made it far easier for homeowners to take action against factors. I believe that further work in the area would be welcomed by many across this Chamber and by tenants and homeowners in Scotland.

As we have heard from the hon. Member for Moray West, Nairn and Strathspey, when residents do not have direct control over their energy supply, access to the Energy Ombudsman depends on the specific arrangements between them and the intermediary contracting with the supplier. If residents do not have control over the party that contracts with the supplier, allowing them access to the ombudsman fundamentally changes the role and purpose of the Energy Ombudsman as a service between the supplier and the contracted customer. Ofgem is always happy to clarify where consumers are currently able to access the ombudsman, to make sure that customers are not missing out on any avenues of redress to which they are entitled, but I am happy to take away the hon. Member’s point and raise it when I next meet the Energy Ombudsman in person.

Meter profile classes, which the hon. Member also raised, are the responsibility of Elexon. Ofgem has previously clarified that, for communal supply arrangements, profile classes should not be the final determining factor in the supply type offered by suppliers. If further clarification is needed in that area, it can be explored by Ofgem and Elexon. I encourage the hon. Member to write to both of them on that point.

We are aware that not having direct control over all aspects of the supply can create difficulties for households. Where households do not have direct control over their individual supply arrangements, Ofgem’s maximum resale price rules protect them from being overcharged by limiting the price of energy charged to consumers to the price paid by those procuring the energy. The principle is that profit should not be made when reselling energy in those kinds of arrangements. The Government are very clear that resellers such as factors or landlords should not profit from the resale of energy. The maximum resale price is set at cost pass-through, meaning that the maximum price at which energy can be resold is the same as the price that the reseller paid. Many who are resold energy have limited choice over who supplies them. The maximum resale price is important, as it is the main protection against resellers exploiting their position.

The energy system has evolved significantly since the last substantive review of maximum resale price. The transition to an increasingly decentralised, digitalised and decarbonised system, driven by net zero ambitions and technological innovation, has seen new challenges and opportunities emerge. Ofgem has begun a review of the maximum resale price to determine whether it delivers fair, transparent pricing and adequate consumer protection and whether it enables investment in the low-carbon infrastructure and services necessary to deliver net zero at the lowest cost.

Ofgem has identified that enforcement mechanisms for the current maximum resale price rules are failing to protect some consumers. That is a key area of its current review, and decisions on any further action that may be needed will be made on the basis of those findings. The review started with a call for input in autumn 2025 to gather evidence, and Ofgem aims to publish a policy consultation in summer 2026. The MRP has an important role across the energy industry: as well as improving the situation for households, changes to the MRP have a potential positive impact on other areas of the energy industry.

I will like to touch briefly on the point that the hon. Member for Yeovil (Adam Dance) raised about his constituent. He may already know that we have announced regulation of third-party intermediaries. We will take that forward through upcoming legislation—this is an important point—to give people more power in brokered energy deals.

Ultimately, households in factored properties feel that their energy costs, for communal areas and otherwise, are too high—because fundamentally they are too high. As hon. Members will know, international gas prices are still 40% higher than in 2021. Permanently reducing energy prices can be achieved only by moving to home-grown, clean power that we control. That is why my Department’s central mission is to deliver a clean power system by 2030 through renewables and through new nuclear power. This is the way to break our dependence on global fossil fuel markets and permanently protect bill payers from higher prices.

The Government are determined to deliver on that mission, and my Department is leading an ambitious programme of work that will make it happen. For example, the creation of GB Energy will help us to harness clean energy; contracts for difference will continue to drive clean power investment, as we have seen from today’s announcement of allocation round 7; the results of AR7 improvements to the capacity market will ensure security of supply while maximising bill payer value for money; and network improvements, with network providers finally making significant investment after years of under-investment, will reduce the costs of operating the energy system for decades to come.

Across all fronts, the Government are taking action to drive down energy bills. Many households in factored properties will also benefit from the announcements that the Chancellor made in the autumn Budget, with action to take an average of £150 off the cost of domestic energy bills by closing the energy company obligation scheme, and providing Exchequer funding to reduce the cost of the renewables obligation for domestic energy suppliers from 1 April. Those measures are designed to provide immediate relief for people across the country and set the foundation for sustained long-term reductions in energy bills through a transition to clean home-grown power. That support, as many hon. Members will know, comes on top of the £150 off energy bills, a measure that was provided by the Government for about 6 million families and was extended—almost doubled—under the warm home discount this winter. It is cutting fuel poverty right now for those consumers who are in receipt of it.

In addition to our work on reducing energy prices, the Government are delivering record investment in upgrading our housing stock through the warm homes plan. We have committed £15 billion to making the biggest ever public investment in home upgrades, upgrading up to 5 million homes by accelerating the installation of heat pumps, solar panels, batteries and insulation. When it is announced, it will come with Barnett consequentials for the devolved Governments, including the Scottish Government, to develop their own schemes under the funding. Alongside our action to make electricity cheaper and more flexible, that is how we are delivering warmer, more affordable homes and repairing a broken energy system.

I thank hon. Members again for being present at the debate, for raising these issues and for all their contributions, which I assure them will be taken into consideration by the Government and by Ofgem as we move forward.

Question put and agreed to.

Oil Refining Sector

Martin McCluskey Excerpts

Wednesday 14th January 2026 Commons Chamber

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

I thank the hon. Member for Brigg and Immingham (Martin Vickers) for securing this debate. I know that he and other hon. Members, including my hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn), have been engaging closely on this issue with the Minister for Energy, who stands ready to continue to engage with them on the detail.

Let me start with Prax Lindsey oil refinery. It entered insolvency on 30 June 2025 because of the untenable position in which the owners left the refinery, which gave the Government very little time to act. I know how difficult the process has been for the workers, their families and the local community. The insolvency process at the refinery is led by the court-appointed official receiver, who must act independently, in accordance with his statutory duties. Since the insolvency, we have worked with the official receiver to protect workers, and to ensure the safety of the site and the security of fuel supplies. That has also allowed time for bidders to express an interest in the site and its assets.

After a thorough process to identify a buyer for the site, the official receiver has determined that Phillips 66 is the most credible bidder and can provide a viable future for the site. I am glad to say that the sale is expected to complete in the first half of 2026. As many hon. Members will be aware, Phillips 66 is an experienced and credible operator of a Humber refinery, next door to Lindsey. It already supplies fuel to the region and has consistently turned a profit in recent years. The sale allows Phillips 66 to quickly expand operations at its Humber refinery.

The company has decided not to restart stand-alone refinery operations at Lindsey. In its words, not mine,

“Due to the limitations of its scale, facilities, and capabilities, evaluations have shown that the refinery is not viable in current form.”

Although that is disappointing, it is not totally unexpected, given the long history of problems with the business. We understand that the previous owners, Total, sought to sell the refinery for several years and sold it to Prax for a nominal amount. Since Prax’s acquisition in 2021, the refinery has recorded about £75 million of losses. In addition, following a thorough assessment of offers, the official receiver confirmed that no offer was put forward that would credibly see a return to refining operations in the next few years.

Phillips 66 plans to integrate key assets into its Humber refinery operations, expanding its ability to supply fuel to UK customers from the Humber refinery. That is positive news for boosting domestic energy security, securing jobs—including hundreds of new construction jobs over the next five years—and creating future growth opportunities for renewable and traditional fuels. That being said, Ministers in the Department and I recognise that this is a very worrying time for workers, and I am glad to report that the remaining 250 directly employed workers are guaranteed employment until the end of March, although that will be cold comfort to many of them. Phillips 66 will provide further information on the number of jobs that will be retained as it moves towards completion of the sale in coming months. The Minister for Energy has asked Phillips 66 for clarity as soon as possible, and to retain as many jobs as possible. The Government will continue to support the 124 workers affected by redundancy last October.

[Richard Tice]

The bottom line is that P66 is mothballing the site, and will use certain bits of it for parts, rather than investing in its other site. Will the Minister allow a full, open and transparent look at alternative bids that would have kept the site open, and would have allowed us to keep many more jobs and to retain a strategic national asset?

[Martin McCluskey]

The hon. Gentleman will know that such discussions are commercially confidential, and the official receiver has undertaken an independent process to come to his decision.

As my hon. Friend the Member for Great Grimsby and Cleethorpes mentioned, the support for the 124 workers affected by redundancy last October includes a training guarantee to ensure that they have the skills that they need, and are supported to find long-term jobs. That goes above and beyond the usual support offered in insolvency situations. I am pleased to confirm that many —the majority—of those workers have already taken up this offer. My hon. Friend the Minister for Energy will be pleased to discuss any issues that my hon. Friend the Member for Great Grimsby and Cleethorpes thinks may emerge to do with the training guarantee.

I believe that the agreement with Phillips 66 marks the next step in securing an industrial future for the site and for the workers, who were badly let down by the former owners. The circumstances surrounding the insolvency are deeply concerning, and that is why the Energy Secretary immediately demanded that the Insolvency Service launch an investigation into the owners’ conduct and the circumstances surrounding the insolvency, which is ongoing.

Turning to issues in the broader UK oil refining sector, the UK’s refineries continue to play a vital role in maintaining reliable supplies of essential fuels that keep transport moving, industry operating and support households with their day-to-day lives. We appreciate that their contribution goes far beyond fuel alone. They are anchors for local economies, providing well-paid, skilled jobs and supporting a wide web of supply chains, which involve everything from chemicals to plastics to advanced manufacturing.

Refinery facilities also enable the production of specialist materials that many of our industries rely on. For example, the Humber refinery produces the UK’s only anode-grade petroleum coke, used in electric vehicle technology, while Fawley’s output of specialised rubber helped to ensure vaccine vials could be produced securely during the pandemic. Crucially, our refineries are also adapting for the future. They are investing in modernisation, low-carbon fuels, and technologies such as carbon capture, which are all essential to the UK’s transition to net zero. The Humber region will have a major role to play in that over the coming years. While overall fuel demand is expected to shift over time, sectors such as aviation, maritime and heavy industry will continue to depend on refined products well into the future. We want to preserve our refining sector and keep it competitive.

[Melanie Onn]

On the point about keeping UK oil refineries competitive, what will be the Government’s position at the European Union summit in May, in discussions on the emissions trading scheme? What will they take forward?

[Martin McCluskey]

I will write to my hon. Friend on that point about the carbon border adjustment mechanism and the ETS.

As was set out in the autumn Budget, we are reviewing critical policies to address the challenges that the sector faces. I will briefly go through the steps that we have already taken to help the downstream sector adapt and stay competitive. First, through the renewable transport fuel obligation and the new sustainable aviation fuel mandate, we are backing the production and use of cleaner fuels. The Humber refinery is already delivering sustainable aviation fuels at scale, and refineries at Fawley and Stanlow are benefiting from Government support through the advanced fuels fund to bring next-generation fuels to market. We are also working to de-risk investment in sustainable aviation fuel production through the revenue certainty mechanism.

Secondly, we are working closely with industry on major decarbonisation efforts, including carbon capture and hydrogen projects, within industrial clusters such as Viking and HyNet, which will be central to keeping UK manufacturing competitive as global markets tighten emissions standards. The UK ETS Authority’s decision to maintain current benchmarks for the 2027 scheme year provides the consistency and breathing room that energy-intensive industries need to plan investments and manage costs effectively.

In the autumn Budget, we committed to assessing the feasibility of including refined products in the carbon border adjustment mechanism. That is a key priority for industry, and it would help ensure that UK refineries were not undercut by imports produced to lower environmental standards. Collectively, these measures signal our determination to create the conditions for continued investment, innovation and long-term competitiveness as we transition to a low-carbon economy.

Looking ahead, the Government are deepening their engagement with the sector to ensure a smooth and secure transition in the coming years. It is important to note that Minister Shanks led the first ministerial—

[Madam Deputy Speaker (Caroline Nokes)]

Order. The Minister will know that we do not refer to our colleagues by their names.

--- Later in debate ---

[Martin McCluskey]

Thank you for reprimanding me, Madam Deputy Speaker. The Minister for Energy led the first ministerial roundtable with the sector for more than a decade, and will continue to engage with the industry.

In closing, let me be clear: we recognise the importance of the Lindsey oil refinery and the Lindsey site to the local community and the national economy. The integration of its assets into the Humber refinery will boost energy security and support high-quality employment locally. The UK refining sector matters, and that is why this Government are acting. From supporting low-carbon fuel production and deploying carbon capture and hydrogen, to launching a call for evidence that will shape our long-term strategy, we will work with industry, devolved Governments and the community to deliver a managed transition.

Question put and agreed to.