Many of you will have watched Prime Minister Liz Truss’s announcement that an Energy Price Guarantee (EPG) will be introduced from the 1st October under which domestic energy bills in Great Britain will be capped for two years at the cost of £2,500 for the average household (plus all households will receive at least £400 this winter from the previously announced Energy Bill Support Scheme). The Government estimates that this will save a typical household £1,000 a year (based on the 1st October price cap previously announced) and reduce inflation by 4%. Park homes, homes on heat networks, and those using heating oil will be supported by a fund to ensure all UK consumers are helped.
While we are pleased that households will be supported over the next two years, people on a low income may still find it hard to afford to heat their homes this winter.
In addition to this, the PM announced a “temporary suspension of green levies”. There has been some speculation that this might refer to ECO and Warm Home Discount, which are funded through a levy on bills, and often lumped together with environmental obligations in news reports. But after engaging with BEIS this afternoon we want to reassure you all that the Energy Company Obligation and Warm Home Discount will continue to operate as per the regulations and the operation of these schemes is not directly affected by today's announcement.
The Prime Minister also confirmed a further package of support including temporary energy bill reduction for businesses and a review of how to deliver net zero by 2050. Noticeably absent from the list of measures was a commitment to raising the energy efficiency of Britain’s homes. We are disappointed there has been no mention of the significant role energy efficiency can play in lowering bills for the long term and securing our energy supply.
We will be following developments closely and provide our partners with a fuller briefing in due course.