Dear Constituent,
Thank you for contacting me about the rising cost of living and the Warm This Winter campaign.
Covid-19 and Putin’s war in Ukraine have caused immense challenges for our country, with energy prices rising and families facing significant cost-of-living pressures.
Supporting vulnerable people with their energy bills and the cost of living has been at the forefront of Government action. The Prime Minister has committed to halving inflation this year to ease the cost of living and give people financial security. The Energy Price Guarantee and the Energy Bills Support Scheme are saving households across the country hundreds of pounds and eight million low-income households are being supported with further cost of living payments from Spring 2023 as well as the payments made during last year. I have a dedicated page on my website which outlines all of the financial support provided by the Government to support those most vulnerable with their cost of living and you can find this here: Support with the Cost of Living | Richard Fuller
The Government has taken steps to help the lowest-income households through these times: reducing the Universal Credit taper rate so that those in work can keep more of their money; increasing the National Living Wage; freezing fuel duty for the twelfth consecutive year; increasing benefits and pensions by 10.1%, providing more than £51 billion in support with the cost of living ensuring that all households received at least £400 and many households received up to £1650 last year and this year, it will prioritise further payments of up to £900 for those in receipt of means tested benefits, the disabled and pensioners (depending on circumstances) and committing more than £2 billion to the Household Support Fund which is specifically designed to support people with help with rising costs. I accept that the increased cost of living has been unwelcome but I do believe that the Government has responded by making available as much support as possible.
Since Ofgem’s confirmation of the first price cap rise, the Government has put forward an ambitious support package to help both lower and middle-income earners with the immediate adjustment. This includes a £400 grant for energy bills for all. Further, a non-repayable £150 cash rebate was provided for homes in Council Tax bands A-D last year, equivalent to 80 per cent of all households and £144 million of discretionary funding for local authorities to support those not eligible for the council tax rebate. This means that most families received £550 with lower income families receiving more help. The Government has continued to make these payments and this year it will provide extra one-off payments of £900 for the 8 million households on means-tested benefits - Millions of low-income households to get new Cost of Living Payments from Spring 2023 - GOV.UK (www.gov.uk)
The Government has introduced an Energy Price Guarantee (EPG) which will give people certainty with their bills until June. The EPG now applies and will discount the unit cost for gas and electricity use. This guarantee, which includes the temporary suspension of green levies, limits the amount you can be charged per unit of gas or electricity. As you may be aware, the current price guarantee, set at £2,500, has been in place since 1 October and has meant that the Government has subsidised a significant amount of people's energy bills.
More broadly, I know that the Government is working to reduce bills and tackle fuel poverty, for example through the introduction of home energy efficiency measures. The Government’s Energy Company Obligation and the expanded Warm Home Discount schemes will also provide at least £4.7 billion of extra support to low-income and vulnerable households between 2022 and 2026.
This remains a difficult time for many and the Government’s measures have resulted in significant and unprecedented support being made available with the most support being targeted on those on means-tested benefits, the disabled and pensioners.
The Energy Company Obligation (ECO) has also been extended until March 2026 at an increased value of £1 billion per year, Energy Company Obligation (ECO) | Ofgem. While I am glad that the UK’s renewable capacity is up 500 per cent since 2010, the Government aims to accelerate renewables with annual Contract for Difference auctions. The more cheap, clean power we generate here in the UK, the less exposed we will be to global gas markets.
The recently introduced Energy Prices Act 2022 includes powers to 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 also launched the Review of Electricity Market Arrangements, Review of electricity market arrangements - GOV.UK (www.gov.uk). It considers a range of enduring reforms, including: increasing investment in low-carbon capacity; making gas-fired generation the price-setter for electricity less often; and reforms to the wholesale market so that volatile gas prices do not set the price of cheaper renewables, with the intended effect of decoupling gas and electricity prices.
Thank you again for taking the time to contact me.
Sincerely,
