Mike Amesbury

The precise impact of a new hydrogen levy on energy bills will depend on future policy design choices and market conditions. This means there is currently uncertainty regarding possible consumer bill impacts.

The Government will consult on the detailed levy design before laying regulations that introduce the levy. The Government intends to publish an Impact Assessment alongside the first set of regulations that is expected to provide information on the potential impacts of the levy on consumers’ energy bills.

There are no plans to remove the proposed hydrogen levy from the Energy Bill.

The purpose of the levy is to provide long-term funding for the hydrogen production business model. This could unlock significant private sector capital by 2030, create thousands of jobs, grow CCUS and hydrogen supply chains, and deliver carbon savings which help meet net zero.

The provisions in the Bill will not immediately introduce a levy. They will only enable Government to introduce a levy through secondary legislation. The decision to introduce the levy will take into account all relevant considerations, including energy bill affordability.

The Boiler Upgrade Scheme (BUS) budget is £450 million, split equally over three financial years (2022-2025). The Government explored options to carry over unused budget from year 1 of the scheme, but due to the accounting rules for capital spending, the Government does not expect this to be possible and the underspend will be returned to HM Treasury.

House boats with a permanent residential mooring can receive the Alternative Fuel Payment via the Alternative Fund where otherwise eligible. To check eligibility and apply, people need to search for “Apply for the alternative fuel bill support if you do not get it automatically” in the search bar on GOV.UK or in an internet search engine.

The Government is also keen to support those without fixed address. The Government is currently working to find an acceptable method for these households to provide proof of eligibility, whilst protecting public funds, so they can claim the AFP AF support.

The recent Energy Security Strategy doubled our ambition from 5GW to 10GW of low carbon production capacity by 2030 with at least half of this coming from ‘green’ electrolytic hydrogen. This included a commitment to host yearly electrolytic allocation funding rounds for projects across the UK, which combines Hydrogen Business Model revenue support with optional CAPEX funding through the Net Zero Hydrogen Fund. Together with a clear policy and regulatory environment, we expect to mobilise over £9 billion of private investment in production alone across the UK by 2030, which will benefit the hydrogen economy across the UK.

The recently introduced Energy Prices Bill includes powers to help address the link between high global gas prices and the cost of low-carbon electricity, allowing consumers to benefit from the ‘green dividend’ of low-priced clean energy.

The Government has launched the Review of Electricity Market Arrangements. It considers a range of enduring reforms, including ways of increasing investment in low-carbon capacity, making gas-fired generation the price-setter for electricity less often, and reforms to the wholesale market so volatile gas prices do not set the price of cheaper renewables, which could have the effect of decoupling gas and electricity prices.

The Government provides support to households to improve their energy efficiency. The Social Housing Decarbonisation Fund, Home Upgrade Grant, and Local Authority Delivery schemes will deliver energy efficiency upgrades to around half a million homes. The Energy Company Obligation (ECO) has also been extended until March 2026 at an increased value of £1 billion per year.

Exploration or development of shale gas will need to meet rigorous safety and environmental standards, including those set by the Environment Agency and the Health and Safety Executive.

The Government remains determined to secure a competitive future for our energy intensive industries (EIIs), providing them with extensive support, including over £2 billion to help with the costs of energy and to protect jobs. As part of our British Energy Security Strategy, we recently announced an extension of the EII Compensation Scheme for a further three years and its budget will be more than doubled.

The Government announced a new six-month scheme – the Energy Price Guarantee for Businesses (EPGB) – to protect all businesses and other non-domestic energy users from soaring energy costs. It will offer comparable support to that being provided for consumers and we expect the scheme to be available in the autumn.

The Government remains determined to secure a competitive future for our energy intensive industries (EIIs), providing them with extensive support, including over £2 billion to help with the costs of energy and to protect jobs. The British Energy Security Strategy recently announced an extension of the EII Compensation Scheme for a further three years and its budget will be more than doubled.

The Government announced a new six-month scheme – the Energy Price Guarantee for Businesses (EPGB) – to protect all businesses and other non-domestic energy users from soaring energy costs. It will offer comparable support to that being provided for consumers and more details will follow shortly. After this initial six-month scheme, the Government will provide focused support for vulnerable sectors, targeted to make sure those most in need get support.

Households not on standard gas or electricity contracts, such as those in rural areas, will receive equivalent support to that provided through the Energy Bills Support Scheme, and the Energy Price Guarantee. The Government is working at pace to determine the most practical and tested routes to deliver this support. As part of this, for households who do not use gas for domestic heating, the Government has committed to provide an additional payment of £100 to compensate for the rising costs of other fuels such as heating oil.

On the 26 May my Rt hon Friend Mr Chancellor of the Exchequer announced that the Energy Bills Support Scheme will increase to £400 from October 2022, which will now be a non-repayable grant.

I refer the Hon. Member to the answer I gave to the Hon. Member for Lewisham, Deptford on 28 April 2022 to Question 155833.

My Rt hon Friend Mr Chancellor of the Exchequer has also announced a one-off £150 payment for people on disability benefits this year, alongside other cost of living support measures.

The Government understands that some households with a disability or medical condition will have higher energy costs than average. Certain specialised NHS England services do provide rebates on energy costs for patients using medical equipment at home, such as home oxygen concentrators or adult home dialysis. These arrangements are unique to the contracts or service specifications of these conditions. Clinical Commissioning Groups are best placed to support their local populace.

On 26 May, as part of an additional £15 billion package of cost-of-living support, it was announced that the six million people who receive disability allowance will get a payment of £150 to assist with rising energy prices. Additionally, households will get £400 of support with their energy bills through an expansion of the Energy Bills Support Scheme.

The Government has committed to spend £6.6billion across this Parliament to decarbonise buildings. This funding supports energy efficiency improvements through the Social Housing Decarbonisation Fund, the Local Authority Delivery Scheme and the Home Upgrade Grant.

Through the Energy Company Obligation, the Government has also set a target for larger energy suppliers to deliver energy efficiency savings by 2026. For those not eligible for Government support, the green finance offer will be improved.

The Government is also investing in training. In 2021, the £6 million BEIS Skills Training Competition resulted in 7,000 opportunities to learn retrofit skills and will be developing plans for a 2022/23 competition.

Introducing non-means-tested benefits, such as Personal Independence Payment (PIP), Disability Living Allowance (DLA) and Attendance Allowance (AA), into the eligibility criteria would mean that many households on lower incomes and in deeper fuel poverty would be disadvantaged.

Around 62% of PIP and DLA recipients also receive one of the qualifying means-tested benefits and so would be considered low-income under the Core Group 2 criteria. Those households with high energy costs would be eligible for a rebate. Recipients of AA, a pension-age benefit, who claim Pension Credit Guarantee Credit will, in most cases, qualify for a rebate through Core Group 1.

As a private business, Royal Mail’s management sets the prices for its services. The Government does not have a role in Royal Mail’s day-to-day commercial or operational decisions. In setting its prices however, Royal Mail must work within the regulatory framework set by Ofcom, the independent regulator. This framework currently imposes price caps on certain second-class products.

In January 2021, Royal Mail raised the price of second-class standard letter stamps to the level of the cap, and it can now only raise prices for that product in line with CPI rates for the remainder of Ofcom’s current review period, ending in March 2024. Ofcom plans to begin work towards the end of this year on a review of the appropriate scope and level of the safeguard caps that should apply from April 2024.

The development of stamp products is also an operational matter for Royal Mail. Royal Mail has announced a ‘Swap Out’ scheme to exchange existing stamps for new barcoded versions which is set to open on 31 March 2022. Royal Mail will set out further details on the scheme in due course.

The Government is in regular contact with industry to discuss the impact of unprecedented global gas prices and will continue to monitor the situation closely to ensure consumers are protected.

Ofgem has robust rules in place to protect Prepayment meter customers. In December 2020, Ofgem introduced Licence Conditions that require energy suppliers to provide extra support for customers using prepayment meters. These include an obligation on suppliers to make emergency and friendly-hours credit available to all pre-payment meter customers.

Where a supplier identifies that a prepayment customer is in a vulnerable situation, including where a customer is self-disconnecting or self-rationing their supply, they must offer additional support credit. When assessing how a customer will repay any credit offered, suppliers must also consider their ability to pay.

The Government recognises many households will need support to deal with the impact of high wholesale energy costs, which are being affected by global factors.

In response, the Chancellor of the Exchequer has announced a package of support to help households with rising energy bills, worth £9.1 billion in 2022-23. This includes a £200 rebate for households delivered via their energy bill this autumn, a £150 non-repayable reduction in Council Tax bills for all households in Bands A-D in England and £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax reduction.

This is in addition to the support Government will continue to provide through the Warm Home Discount Scheme, which this winter is providing over 2 million households a £140 rebate off their energy bill each winter. The Government have announced that it would be increasing to £150 and help an extra 780,000 households next winter. Further, Winter Fuel Payments and Cold Weather Payments help ensure the most vulnerable are better able to heat their homes over the colder months.

Royal Mail has publicly stated that it is aware of the reduction in service levels in some areas and is taking action to reduce delays to deliveries. Its contingency plans to mitigate disruption to postal services are overseen by Ofcom.

Ofcom continues to monitor Royal Mail’s performance to ensure it is providing the best service it can to customers and has powers to investigate and take enforcement action if Royal Mail fails to achieve its performance targets.

The Lostock Sustainable Energy Plant was granted consent under the Electricity Act 1989 in October 2012 by Ministers in what was then the Department of Energy and Climate Change. The consent was subsequently varied in July 2019. A further application to vary this consent was submitted in October 2021 to my department. When deciding whether to refuse or consent this application, the Secretary of State will consider all matters relevant to planning. The Government does not comment on specific matters relating to live applications.

We are monitoring the situation and are not aware of any material supply issues with CO2 for the meat and frozen food industries at the current time.