Draft Warm Home Discount (Amendment) Regulations 2025

The Committee consisted of the following Members:

Chair: Peter Dowd

† Arthur, Dr Scott (Edinburgh South West) (Lab)

† Baker, Alex (Aldershot) (Lab)

† Cocking, Lewis (Broxbourne) (Con)

† Darlington, Emily (Milton Keynes Central) (Lab)

† Fahnbulleh, Miatta (Parliamentary Under-Secretary of State for Energy Security and Net Zero)

Farron, Tim (Westmorland and Lonsdale) (LD)

† Fookes, Catherine (Monmouthshire) (Lab)

† Heylings, Pippa (South Cambridgeshire) (LD)

† Khan, Naushabah (Gillingham and Rainham) (Lab)

† Lewin, Andrew (Welwyn Hatfield) (Lab)

† McDonald, Chris (Stockton North) (Lab)

† Rushworth, Sam (Bishop Auckland) (Lab)

† Sewards, Mark (Leeds South West and Morley) (Lab)

Snowden, Mr Andrew (Fylde) (Con)

† Thomas, Bradley (Bromsgrove) (Con)

† Timothy, Nick (West Suffolk) (Con)

† Turley, Anna (Lord Commissioner of His Majesty's Treasury)

Sara Elkhawad, Committee Clerk

† attended the Committee

Fourth Delegated Legislation Committee

[Peter Dowd in the Chair]

Draft Warm Home Discount (Amendment) Regulations 2025

18:00:00

I beg to move, That the Committee has considered the draft Warm Home Discount (Amendment) Regulations 2025. The regulations were laid before the House on 19 June 2025. In February, we consulted on expanding the warm home discount scheme, which provides vulnerable households with a rebate of £150 off their energy bills; it goes to all bill payers on means-tested benefits. Today we are discussing the regulations that will allow us to implement those changes and bring energy bill relief to 2.7 million additional households. Let me begin with the context and why we are doing this. Since we took office, the Government have been committed to alleviating fuel poverty and addressing the cost of living crisis. When we reviewed the 2021 fuel poverty strategy, it was clear that progress had stalled under the last Government and that we needed a new plan to accelerate our progress towards tackling fuel poverty. There are two primary ways in which such progress can be accelerated: upgrading homes, to make them warmer and cheaper to run; and making energy more affordable, through expanding direct bill support. The first will be driven through our £13.2 billion investment in the warm homes plan, which aims to upgrade homes across the country and transform our housing stock. But while we do that, some households are at risk of being left behind before they can feel the full benefits. Energy bill rebates such as the warm home discount can reach families immediately; they are easy to deliver and consumers do not need to take any action to receive them. As a result, while we tackle the underlying issues that are driving up energy bills through our warm homes plan and our sprint to Clean Power 2030, the warm home discount provides a vital short-term means of mitigating fuel poverty and providing support to the households that need it the most. Since 2011, the warm home discount has helped around 3 million low income and vulnerable households each year by reducing their energy bills at a time of year when that is most needed. Under the current scheme, around 1 million low income pensioners in receipt of guaranteed pension credit received the £150 warm home discount as an automatic rebate on their energy bills. Over 2 million low income and vulnerable households also received the rebate. This statutory instrument would amend the Warm Home Discount (England and Wales) Regulations 2022 to allow amendment to the eligibility criteria for this coming winter, so that more rebates are provided to households. It would also extend the period during which rebate notices can be issued to suppliers, ensuring that as many rebates as possible can be issued by suppliers before the current regulations expire on 31 March 2026. The SI also amends the Warm Home Discount (Scotland) Regulations 2022, to increase suppliers’ non-core spending obligation by an amount considered to be commensurate to the expected increase in England and Wales. The SI is a result of a consultation in February 2025 in which we proposed to remove the “high cost to heat” threshold, which can mean that families in almost identical circumstances are treated differently, with some receiving the rebate while others miss out. The current system also excludes many households in smaller properties because the home is not classified as “high cost to heat”. Removing the “high cost to heat” threshold will make all energy bill payers who receive a qualifying means-tested benefit eligible for the warm home discount. It would bring around 2.7 million additional households into the scheme, pushing the total number of households receiving the support to around 6 million—one in five households in the UK. Before I conclude, I must draw Members’ attention to the correction slip published on 4 July. It corrects a typo on page 3 of the draft regulations, from “Her Majesty’s” to “His Majesty’s”. In conclusion, the regulations will make the necessary legislative changes to expand the warm home discount so that it reaches an extra 2.7 million households at a time when families are struggling with their energy bills and absolutely need that vital support. I commend the regulations to the Committee.

18:05:00

It is a pleasure to serve under your chairmanship, Mr Dowd. I am pleased to respond to the draft regulations on behalf of His Majesty’s Opposition. Let me start by saying that if the Minister thinks that progress stalled under the last Government, this Government’s abolishing and then reinstating the winter fuel payment has been a funny way of getting around that. By expanding the warm home discount scheme, the Government are broadening its reach to 6 million households across the UK, up from the 3.4 million households that currently receive the annual £150 energy bill rebate. We should do everything that we can to tackle fuel poverty, but we must ask ourselves what the best way is to resolve the root causes of the energy bills crisis. Under the warm home discount scheme, the Government are funding support for people who cannot afford their bills by pushing up green levies on everyone’s bills. The impact assessment for this legislation clearly states that the scheme expansion will increase everyone’s bills by £15. The Minister did not mention that when the expansion was announced, but the Government should be honest with the public that they have deliberately take a decision that will increase everyone’s bills. Higher green levies will pay for an increase in the overall cost of the scheme from £600 million to £1 billion. It is hard to see how this expansion will achieve the Government’s solemn manifesto pledge to cut energy bills by £300 before the end of this Parliament. We are seeing this approach play out across energy policy: the Government raise the cost of energy with their unrealistic decarbonisation policies; energy-intensive industries then suffer under the highest industrial energy prices in Europe; and the Government step in with subsidies to help them cover the cost that they created to begin with. It is madness, and we are now seeing the same thing done for families. In public policy, the simplest solution is often the best. In the case of fuel poverty, the Government can help everyone afford their bills by delivering abundant and cheap energy, but they are piling on costs through their Clean Power 2030 plan. That will increase the price of carbon to £147 per tonne, which will, in turn, increase bills for every family in the country. We have already paid £700 million so far just this year to turn off wind farms when there has been too much wind. We now hear that we are going to pay solar farms just the same to turn off in certain circumstances. The National Energy System Operator forecasts that these constraint costs will hit £8 billion in 2030 because of Labour’s plans to build more renewables than ever before. Instead of rushing ahead to build a system entirely dependent on unreliable and expensive renewables such as wind and solar, we should be going further and faster with nuclear and expanding oil and gas exploration in the North sea. Instead, we are importing fossil fuels from Norway, drilled from the very same seabed that we could exploit, while insisting that we are too good and too green to do that for ourselves. All of this is a choice. The Labour party chooses to increase energy costs, including for people on low incomes, with reckless targets and arbitrary mandates. We will abstain on these regulations, but the unavoidable fact remains that this Government are increasing energy bills for the poorest when we ought to be making energy as cheap as possible for everyone.

18:08:00

I thank the hon. Member for his contribution to this debate. He is nothing but consistent, which is about the only upside that I can speak about. He and the Conservative party have some cheek trying to lecture the Government on energy bills being too high, given that they oversaw record energy bills and an anergy crisis. I will address his points and then talk about this important intervention that we are taking forward. Clean power and our drive to sprint to clean power is not ideological. It is a recognition and a response to the fact that energy bills reached sky high prices because of our dependence on global fossil fuel markets. We saw that during the energy crisis that the Conservative party presided over. Families and businesses across the country have been paying the price of that. That party was happy with that reality, but it is not one that we are willing to confront.

I give way first to the shadow Minister.

I will go first, then, and allow my hon. Friend the Member for Broxbourne (Lewis Cocking) to ask a superior question. The Minister is talking about fossil fuel prices and how the Government want to take us away from them. We have had an exchange in the past couple of weeks about when the price cap was lowered because of the fall in wholesale gas prices. When that happened, the Labour party put out literature saying, “£129 off your bills, delivered by Labour”. When I put that to the Minister, she disowned that language and used her own words. I understand why; she is an intelligent and principled person, and that poster from Labour was neither intelligent nor principled. Will she apologise for that and say that it was wrong?

We have had this conversation over and over again. What I would say is that we are very clear that we are on a rollercoaster, with fossil fuel prices driving energy bills up and down. We are absolutely committed to dealing with that. We are also absolutely committed to reducing energy bills, which went up and up under the last Government. We will not allow that to happen: we have made a commitment to reduce energy bills by £300 by the end of this Parliament and we are doing the job of making that happen. I come back to the fact that we have to wean ourselves off fossil fuels. The proposition from the Conservative side, to the extent that it is a proposition, is completely wanting and unrealistic. Families and businesses across the country would be saddled with high prices that were a function of our being on this rollercoaster. We are not willing to contend with such a reality, so we are taking measures. The shadow Minister says that he wants to see more nuclear, but there was not a single expansion of nuclear under the last Government: 14 years absolutely wasted. We are doing the job of getting to clean power in order to reduce energy bills—

Order. We are slightly getting off the topic of the regulations, I am afraid; they are about the warm home discount, not the general issue of fossil fuels. I have given enough latitude already.

Thank you, Mr Dowd, for bringing us back to sanity and the regulations that we are talking about today. We all came into politics to make sure that vulnerable people were not left behind. We know that people are struggling with energy bills and that progress on fuel poverty stalled under the last Government—a complete shame. We are committed to responding to that. The regulations are an important first step. They mean that we can expand the support to 6 million people—one in five households—at a time when we know they absolutely need it. I am incredibly proud that the Labour side of the House is taking this action. I commend the regulations to the Committee. Question put and agreed to.

18:12:00