Thank you for contacting me about the rising cost of living and the Warm This Winter campaign.
I understand anxiety over rising prices and inflation. I want to assure you that the Government will continue to listen and ensure that the policies in place help those who need it most.
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.
Under the Energy Price Guarantee (EPG), the typical household will pay no more than £2,500 on their energy bill until April 2023. Thereafter, the price cap will rise so that the typical household will pay no more than £3,000 until April 2024. The EPG will save the average household a further £500 and mean they will not have to face energy bills of £6,000 this winter or next.
In addition to the EPG, I strongly welcome the Chancellor’s allocation of a further £12 billion for the Government’s cost-of-living support package, taking the total from £37 to £49 billion.
This increase means that, in addition to the Cost-of-Living Payments that started being made in 2022, the Government will provide extra one-off payments of £900 for the eight million households on means-tested benefits, a second £300 Pensioner Cost-of-Living Payment, and another £150 for disability benefit recipients in 2023/24. The Chancellor also announced that the Government will provide £1 billion of extra funding by extending the Household Support Fund to March 2024, bringing the total of the Fund to £2.5 billion.
Regarding insulation, 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.
Regarding renewable energy sources, I welcome that the UK’s renewable capacity is up 500 per cent since 2010. However, in recognition that more must be done, the Government is accelerating renewables with annual Contract for Difference auctions. I want to be clear that the more cheap, clean power we generate here in the UK, the less exposed we will be to global gas markets.
Moreover, 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 also 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 that volatile gas prices do not set the price of cheaper renewables, which could have the effect of decoupling gas and electricity prices.
Thank you again for taking the time to contact me.