I am writing to update you on the Government’s actions regarding prepayment meters and on government support for households facing increased energy prices.
Support with energy costs and prepayment meters
Consumers are being supported with the current high cost of energy, via the Energy Price Guarantee, which will save a typical British household around £900 this winter, and the £400 discount off bills through the Energy Bills Support Scheme. The most vulnerable households will get additional cost of living support delivered via benefits and pensions.
The Government has also launched radio and television adverts across the UK as part of its ‘It All Adds Up’ energy saving campaign. The campaign features tips on simple, low or no-cost actions that households can take immediately to cut energy use and save money while ensuring people are able to stay safe and warm this winter.
The Government recognises the importance of protecting customers, including those who are on a prepayment meter. That is why a new five-point plan has been set out to crack down on the unfair treatment of energy users.
• Government has called for suppliers voluntarily to stop the practice of forced prepayment switching as the answer to households struggling to pay bills and make greater effort to help the most vulnerable.
• Government has asked for the release of supplier data on the number of warrant applications they have made forcibly to enter homes to install meters.
• Government has published a list of supplier redemption rates for the Energy Bills Support Scheme vouchers - showing who is meeting their responsibilities and who needs to do more.
• Government is launching a public information campaign reminding and informing eligible consumers to redeem their Energy Bills Support Scheme vouchers and how to do so. This will be through both advertising and direct communication channels, targeting the most vulnerable and those most likely not to have redeemed vouchers.
• Government is working with Ofgem to ensure it takes a more robust approach to the protection of vulnerable customers and conducts a review to make sure suppliers are complying with rules.
Energy Bill Support Scheme alternative funding
The Energy Bills Support Scheme is already providing a £400 non-repayable Government discount in instalments over six months from October 2022 to March 2023 to help 29 million households with their energy bills this winter.
In addition, Government has been working on the Energy Bills Support Scheme Alternative Funding, an application-based scheme which will be delivered by local authorities in Great Britain and by a contractor in Northern Ireland. The scheme will provide support to around 900,000 households in the UK who have not received the main Energy Bills Support Scheme as they do not have a direct relationship with a domestic electricity supplier.
On 19 December, the Government announced that applications for this extension to the Energy Bills Support Scheme in Great Britain would open in January and that eligible households would include residents of park homes and care homes, as well as those who either receive their electricity through commercial intermediaries or are off the grid entirely. Following a pilot trial of the scheme a further testing period is required and as such there is a short delay in its opening. The scheme is planned to open across all local authorities in Great Britain no later than 27th February.
Developing and delivering a scheme of this kind is a complex task, and it is critical that it is right so that households can quickly and seamlessly receive the support they need.
The Government has been working closely with local authorities in Great Britain to design the scheme and to ensure they are sufficiently prepared for their role in delivering payments.
Households supplied via commercial contracts
In the meantime, households who receive their electricity via a commercial meter will already be benefiting from the Energy Bills Relief Scheme, which reduces the unit cost of gas and electricity and must be passed on to end users in a just and reasonable way. Those not connected to the gas grid will be eligible to receive £200 in Alternative Fuel Payments from February.
The Government will also provide a fixed payment of £150 to all UK non-domestic consumers who are off the gas grid and use alternative fuels, with additional ‘top-up’ payments for large users of heating oil based on actual usage. The Government is committed to delivering these Non-Domestic Alternative Fuel Payments as soon as practically possible.