Warm Home Discount

12:55:00

With permission, I wish to make a statement on the action we are taking to cut energy bills for working families. Three years on from the Russian invasion of Ukraine which sent prices soaring, people up and down the country are still feeling the impacts. Everywhere I go in this job and from every person I speak to, I hear how the wages that used to support families are being swallowed up by sky-high energy bills month after month after month. The truth is that for as long as we remain dependent on gas and volatile global markets, British people will continue to pay the price and we will continue to be held back as a country. That is why we are finally ending our exposure and our vulnerability by sprinting to clean, affordable energy that is controlled by us. We know that in the meantime, we must do everything we can to support families who are under huge amounts of pressure with their energy bills. Today, we are setting out how we will help millions more households with their bills this winter by expanding the warm home discount. Previously, around 3 million people received the £150 rebate off their energy bills, but millions of people living in homes not classified as “hard to heat” were excluded as a result of criteria introduced by the previous Government in 2022. We believe those criteria were unnecessary and unreliable. We believe that it cannot be fair to have two families in almost exactly the same circumstances, with one receiving help and one not. That has been raised repeatedly by consumers and their advocates since the changes were made in 2022, and I absolutely understand their concerns. That is why we are abolishing this restriction. This winter, every single household where the bill payer receives a means-tested benefit will be eligible for the warm home discount, which means a further 2.7 million low-income households will get that vital support. In total, more than 6 million households—one in five families in Britain—will get the help they need this winter. This expansion will help us meet our goal of tackling fuel poverty, which is critical to the work of my Department. It will increase the number of fuel-poor households that receive support, with coverage improving from 30% under the current scheme to around 45%. In total, 1.6 million fuel-poor households will receive support. I have met people on the frontline of the energy bills crisis up and down the country, so I know for a fact that there are families out there right now breathing a sigh of relief because this measure will ease the huge amount of pressure they are under with the cost of living. One issue that is often raised with me is that families can miss out on the warm home discount because the person who receives the means-tested benefit is not named on the energy bill. To be eligible, the means-tested benefit recipient, their partner or their legal appointee needs to be named on the energy bill. I encourage all families who receive a means-tested benefit to check that and, if necessary, to contact their supplier. People need to ensure that the benefit recipient, their partner or their appointee is named on the bill before the warm home discount qualifying date, which is 24 August. At the same time, we are going further to put the energy market back in the service of working people, taking steps to restore confidence and faith in the energy market, which has been shaken. As it stands, too many complaints against energy companies go unresolved or take too long to fix—whether it is suppliers not responding quickly enough or failing to adjust direct debits when families use less energy—which leads to a situation where consumers often do not access the compensation they are entitled to due to an overly complex complaints system. This Government are absolutely committed to standing up for consumers who have had a bad experience of the energy system, and we are working hard to ensure that the system works in the interests of consumers. We have already made real strides in improving conditions for customers. Following the Secretary of State’s intervention and months of Government work with the sector, Ofgem announced £18.6 million of compensation for victims of forced prepayment meters in May, and we will continue to go further. This is a Government willing to use every tool in our arsenal to fight for working people. By moving at speed to deliver clean power, and with the spending review setting out the biggest investment in the domestic clean energy industry in history, we will take back control of our energy system and do the job of protecting consumers. That is why we have wasted absolutely no time in driving forward our clean energy mission in our first year, ending the onshore wind ban, consenting more than 4 GW of renewable energy, launching Great British Energy, funding a new golden era for nuclear, kick-starting carbon capture and hydrogen industries, and investing £1 billion already to upgrade up to 300,000 homes, with £13.2 billion committed in the spending review to upgrade millions more. This is how we will rebuild our energy network and protect families across the country: by supporting more people who need our help this winter; by restoring confidence in a reformed energy market; and by bringing bills down for good with secure, reliable, clean energy. We will ensure that every family in this country has the security of a home they can afford to heat now and in the future. I commend this statement to the House.

I call the shadow Minister.

13:01:00

I thank the Minister for advance sight of her statement—what a delight it was to receive an update on the warm home discount on this, the warmest day of the year. I know that the Minister is a tireless champion for the people of Peckham and for the most vulnerable, and I thank her for all the work that she does behind the scenes for those causes. Exactly one year ago today, the Chancellor said: “Great British Energy, a publicly owned energy company, will cut energy bills by up to £300.” What has happened since? Bills have not fallen by £300, as was promised so many times by the Prime Minister, the Chancellor, the Energy Secretary and Labour MPs. In fact, bills have gone up by almost £300—the opposite of what they all promised just a year ago. On top of that, this Government took the winter fuel payment away from millions of pensioners through a cold winter. This announcement will provide support for some, but it is nothing more than a sticking plaster—the fact is, this Government’s energy policy is making people colder and poorer. The Minister has not said a single word about how this expansion will be paid for. It is a £400 million commitment, but there was no detail in either the Government’s press release or the Minister’s statement about how it will be funded. Will the warm home discount still be funded by levies on everyone’s energy bills? If so, this policy means that energy bills will increase for the majority of bill payers, yet the Minister did not say so in her statement. Will she therefore inform the House whether she has asked her Department to calculate by how much levies on everyone’s bills will increase to pay for the £400 million of extra spending? If so, will she inform the House so that our constituents know how much their bills will increase by under this Labour Government? The Government’s press release said that the expansion of the scheme will be offset by efficiency savings across the energy system, but we have no detail about what those efficiencies are, or how much money will be saved. In fact, the system is becoming less efficient. The National Energy System Operator recently said that the cost of balancing the grid by paying wind farms to switch off when it is too windy increased by 10% to £2.7 billion a year, warning that this will triple to £8 billion a year by 2030 as this Government rush to build more wind farms and solar farms on agricultural land than ever before. That is what this Government are delivering: more subsidies, more levies, more payments for wind farms to switch off, more tech imported from China, and more costs added to everyone’s bills. Will the Minister share some proper detail with the House on exactly how much this will cost the British people? I suspect the answer will be a resounding no. This is a statement devoid of detail because it is designed simply to distract from the fact that this Government’s energy policy is in chaos and driving bills higher and higher. This is a Government driven by the ideology of net zero, not by making energy bills lower for families across Britain. It is a Government of broken promises.

I think the hon. Lady has some cheek, given the previous Government’s record on energy bills. When, under their watch, families across the country were paying sky-high energy bills—with people still paying the price of that today—the idea that the Conservatives would try to lecture us on energy bills is pretty rich. Let me take the hon. Lady’s questions directly. Yes, we are committed to reducing energy bills by £300. We have passed the legislation on Great British Energy and the institution is up and running. We are doing the job of driving down bills—we stand by that commitment, and the way we will deliver it is through investment in clean power. It is very clear that our reliance and dependence on global fossil fuel markets under the Conservatives’ watch was ultimately what led to bills rising. Labour will not make that mistake, which is why we are investing record levels in renewables. That is the way we will drive down costs in the system and drive down bills. This policy is not about ideology; it is about families across the country. The status quo is not tenable. We do not think it is acceptable to have bills at the current levels and to leave families exposed, which is why we are taking action. The hon. Lady asked specifically how this policy will be paid for. The warm home discount is paid for under the price cap. We are very clear that we do not want other families’ bills to increase in order to pay for this change. We have worked with Ofgem to look for savings within supplier operating costs, for instance. Given that debt spiked under the energy crisis, meaning that all households are currently paying a bit on the debt allowance, we are also working with Ofgem to get that debt burden down. We will use the savings there to cover the cost of this policy. We are very clear: support for those who need it; protection for all households.

I welcome the Minister’s statement. I think the shadow Minister was right to highlight this statement being made on the warmest day of the year—this is a Government announcing a warm home plan to literally fix the roof while the sun shines, which the Conservatives failed to do. This announcement will benefit nearly 3 million families, no doubt helping thousands in Hampshire, including many in my constituency. First, on data sharing, one reason it is tough for many families and households to access these benefits is the inability to access data between the suppliers and the Government. Secondly, given that the legacy of the previous Government was to leave us with the highest electricity prices in Europe, can the Minister confirm that the Government are continuing to look at ways to bring down electricity costs for both consumers and businesses?

As always, my hon. Friend puts it perfectly. I will pick up his point on data sharing, which is critical. My Department and the Department for Work and Pensions have been working over the past few months on the sharing of means-tested benefit data so that this will be automatic; come this winter, all eligible consumers will receive a letter informing them that they will be getting the warm home discount. It will be transferred on to energy bills as a credit—a direct payment for consumers—because we have done the groundwork to put that in place. On my hon. Friend’s critical second point, the relative cost of gas and electricity is incredibly high, and we know that is a problem for both households and businesses, particularly as we try to make that transition to clean energy. We are continuing to do that work. I am very clear that we need to deal with that question in order, for example, for our plans to upgrade homes to have the bite and traction they need, and we are absolutely committed to doing so.

I call the Liberal Democrat spokesperson.

We welcome investment in warm homes following a winter in which millions of households were living in fuel poverty. The crisis was exacerbated by the Government’s cut to winter fuel payments— and we welcome the U-turn on that, too. The former Conservative Government’s stop-starts on home insulation policies left thousands of vulnerable people in damp, cold and unsafe homes, with lower energy-efficiency standards and higher bills during an energy crisis. Given that homes in this country are among the oldest and least energy-efficient in Europe, will the Government commit to an ambitious 10-year plan for home insulation, for which the Liberal Democrats have long called? Will they ensure that households on lower incomes will be eligible for free insulation as part of that plan? And, following the Government accepting the campaign of my hon. Friend the Member for Cheltenham (Max Wilkinson) for solar panels to be mandated for all new homes, will they now look to introduce a full zero carbon standard for all new homes and solar for car parks, as put forward by the Liberal Democrats in amendments to the Planning and Infra- structure Bill?

I could not agree more. The record of stops and starts on home upgrades and home insulation is one reason that we failed to insulate as many households as we should have done from the energy price spike. We are committed to a long-term plan to upgrade millions of homes across the country. That is what the warm homes plan will do. We are delighted that this has been backed by the Chancellor with £13.2 billion of investment, and we are now working on how we draw that out across the country. We will make sure that we have the right solution for every household, using a combination of insulation, solar, and heat pumps. We want every household that gets an upgrade to have a home that is warm and much, much cheaper to run. That is our absolute focus and priority. On the future homes standard, we have been working very closely with colleagues in the Ministry of Housing, Communities and Local Government and consulting with developers. We are absolutely committed to driving forward standards. We have set out our ambition to make sure that future homes are fit for the future, using solar and clean heat solutions. We cannot have the situation that we have had in the past, where we built homes that needed retrofitting a few years later. We are committed to our ambition and we will be setting out more details in the warm homes plan.

I warmly welcome my hon. Friend’s announcement, which will mean that 240,000 people in Scotland will benefit to the tune of £150 directly from the UK Government. I know that she will be having conversations with our Scottish counterparts—and I am sure that if SNP Members were here today, they would also welcome this announcement. As she is having those conversations, may I encourage her to talk about what she is doing and how it differs from the SNP’s approach, which involves independence thermometers and housing dashboards? What this Labour Government are doing down here is a practical, tangible example of how we can directly impact the lives of working people.

My hon. Friend is absolutely right. We are engaging with the Scottish Government. Today’s expansion creates more resources for the Scottish Government to ensure that direct bill support is provided to more households. Alongside that, there has to be a plan to upgrade homes and to make sure that we are delivering homes that are warmer and cheaper to run. We will have a plan here, and we expect that, with the additional funding and the example that we have set, the Scottish Government will follow suit, but we are long past the stage of warm words and light action. We need to get on with it, because there are people across the country, including in Scotland, who are struggling. It is the responsibility of Government to get a grip and start to act.

Yesterday, as the Minister probably knows, food bank groups associated with the Trussell Trust lobbied—very effectively —Members on both sides of the House. My local group, the Waterside food bank, impressed on me the gap between the £92, which the Government believe a single person is estimated to need to survive, and the £120 that the food bank believes is necessary for a single person to be able to survive alone. Can the Minister give an indication as to what extent the gap between those two figures will be closed as a result of this initiative?

I thank the right hon. Member for a very good question. We know that families are struggling with the cost of living. We know that families are in poverty, and that many are having to make the choice between heating and eating. We are trying to put in place a range of measures, and the warm home discount —this £150—is part of it. We have extended free school meals to families on means-tested benefits. We are rolling out breakfast clubs. There is a range of things that we are trying to do as a Government to ensure that people who are struggling and who have been struggling for a long time are lifted out of poverty. We are very clear about our ambition. Every time Labour comes to power, our record is that we lift people out of poverty, and we will continue to do that.

I welcome the Minister’s statement, as will nearly a quarter of a million people across Scotland who will benefit from this £150 warm home discount for the first time. We always appreciate these measures a little bit more in Scotland, because our weather is a bit colder. We have to keep reminding people of that, even today. Does the Minister share my pride in this Government expanding support for more people who need it most because we are turning the tide on failure and building a strong economy on the back of clean energy?

I could not agree more with my hon. Friend. The legacy—the inheritance—was woeful. I do not need to say that, because people feel it across the country. We, as the incoming Government, have a responsibility to ensure that we are doing everything that we can to lift living standards—everything that we can to support families who we know are struggling. I share my hon. Friend’s pride in our being able to expand the support, because we know just how much it is needed. None the less, there is more that we need to do. We will not stop here. If we get the roll-out of the warm homes plan right, and if we are upgrading homes, we will be taking up to £600 off bills. The bigger plan that we must take forward will help us to deliver clean power, so that we can reduce bills for everyone. This Government are clear about the task of improving living standards. It is core to what we need to do and to what we need to achieve as a Government, and we are getting on and delivering it.

Will the Minister confirm that park home residents in North West Norfolk and across the country, who pay their bills directly to the site owner, will also benefit from the extended £150 discount, and that when they apply, funding will not be limited, so that everyone who is entitled to this payment will receive it?

I thank the hon. Member for a really good question. Park homes are currently supported through industry initiatives and the warm home discount. We will continue to make sure that park homes are supported. There is obviously work that we need to do, because we are conscious that there are some customers who are not receiving the discount, and we are working with industry to resolve that.

I warmly welcome my hon. Friend’s statement today on the expansion of the warm home discount. It will mean that 240,000 people across Scotland, including many thousands in Paisley and Renfrewshire South, will receive £150 directly off their energy bills from this UK Government. Will my hon. Friend say a little more about the work being done to accelerate proposals to introduce a debt relief scheme, which would target unsustainable debt built up during the energy crisis?

My hon. Friend is right to mention debt relief and the huge burden of debt that we have seen. Over the course of the energy crisis, we saw debt increase to more than £3 billion. For many of those households in debt, there is no route to paying it off. We have been working with Ofgem to put in place a debt relief scheme, using a combination of write-offs of debt and repayment plans, so that we can ensure that more people are lifted out of energy debt and are in a position to afford their energy.

The Minister knows that I have a lot of time for her, and I welcome her announcement today, but it will be of little relief to those who are living with spray-foam insulation that was inadequately installed, and there has been no support from the Government to fix that. Putting that aside, I wondered what Government support is available for off-grid households in rural areas, to ensure that they do not miss out and are included in these plans?

Rural consumers who are on means-tested benefits and linked to an energy supplier should be supported in the right way. We know that there are some off-grid rural households that are not with a particular energy supplier and that that is more difficult. This is why we are working with industry. There is a discretionary amount within the warm home discount that allows industry to find and target those people to provide support.

I think all Labour Members warmly welcome today’s statement, particularly those in Scotland, where 240,000 families will benefit from £150 off their bills this winter. That includes thousands of working families across my constituency. Does the Minister agree that this is another case of the UK Labour Government making a manifesto commitment and delivering on it?

My hon. Friend is completely right—a promise made, a promise delivered. That is what a Labour Government do. We are very clear about the change we need to deliver in the country. Unlike the Conservatives and the Scottish Government, there are no warm words or faffing around; we are getting on with the job of delivering change.

Today’s announcement of the expansion of the warm home discount is extremely welcome and will benefit many people across west Cumbria. One of the first meetings I had with Ministers after the election was with my hon. Friend. Could she set out more detail about how the really welcome warm homes plan will build on this discount to create a permanent, lasting solution for families in my constituency, who face some of the draughtiest homes in the country, to give them real financial benefit?

Fuel poverty is an absolute scourge that we must work hard to eliminate. There are two things we must do to achieve that. On the one hand, we must deliver bills support. The expansion of the warm home discount is so important, because more households in fuel poverty will receive it. On the other hand, we must make sure that we are doing the job of upgrading homes. This year we have invested £1 billion to deliver 300,000 upgrades, but that is not enough. We have to massively increase the number of upgrades so that we are delivering millions over the course of this Parliament. We have committed to £13.2 billion, and we are now doing the work of setting out how we will drive the shift and change that we need to see across the country. We must ensure that the households that need it have insulation, solar panels, batteries and heat pumps so that their homes are warmer, and ultimately so that we can lower bills by up to £600.

Today’s announcement is very welcome and will make a real difference to many of our constituents. I am glad to hear the Minister reaffirm today that in addition to support with bills, the Government recognise the urgent need to ensure that every home is well-insulated and affordable to heat—a genuinely warm home—and are doing that through both hugely increasing standards for new homes and insulating existing homes. She has referenced the £13.2 billion Government commitment to the warm homes plan, which is welcome, though not enough, but why do the spending review documents show that more than a third of that money—£5 billion of the £13.2 billion—is money that the Government expect to get back, presumably to be repaid by households?

I think the hon. Member is referring to some of the financial transaction mechanisms. We will deliver the warm homes strand through Government support to some households as well as by working with energy companies, whether it be suppliers or distribution network operators, in order to ensure that we are driving upgrades. Part of that will involve the Government providing loans to suppliers, which they will pay back over time. I think that is what the hon. Member is referring to. We are very clear that we need up-front investment as a catalyst, and we are clear that we need to upgrade millions of homes and crack on with the job.

I welcome the Minister’s statement. This announcement will mean that over half a million more Londoners will benefit from a £150 discount on their energy bills this winter. Does she agree that along with our free breakfast clubs, the £1,400 per year increase in the minimum wage and free childcare in schools, today’s announcement shows that Labour is putting money back into the pockets of working people in Ealing Southall and across the country?

My hon. Friend is spot on. Members on the Conservative Front Bench are chuckling away in front of me, but it is no joke. We inherited an absolutely atrocious set of circumstances. Families across the country are paying for their failure, with the cost of living at a record high level. I go across the country to speak to people, and I see the impact of the Conservatives’ failure on people’s lives. We were not willing to accept that what we inherited was the status quo. That is why we are taking decisive action. Whether it is the expansions to the warm home discount and free school meals, the increase in the national minimum wage or our record investment in social housing, this Government are getting on with the job of lifting living standards in order to fix the mess we inherited from that lot.

I thank the Minister for her statement and her answers. In the short time she has been in her role, she has always delivered good news, and that is quite a talent, so I say well done and I thank the Government for that. Double the number of households in the United Kingdom will get £150 off their energy bills, and that is very welcome for those on means-tested benefits. However, with one in four children living in poverty in Northern Ireland, it is essential that this announcement applies in Northern Ireland too. Will the Minister confirm that Northern Ireland is included in this help for the vulnerable and those in poverty? Will it come through Barnett consequentials or another way?

Northern Ireland runs its own separate scheme. We are in very close contact with the Northern Irish Government—in fact, I was in Northern Ireland yesterday. We are making sure that our work to deliver clean power, which is our route to lowering bills, and, critically, our work through the warm homes plan is co-ordinated. The hon. Member is right that there are people across the country who are struggling at the moment, and it is absolutely our responsibility to take action to support them.

I thank the Minister for this announcement. As she will recall, we met back in September to discuss my concerns about fuel poverty in my constituency, including the number of children living in cold homes. We specifically talked about this measure. She has taken it away, done the hard graft and delivered, so I thank her for that. As she said in her statement, there are people who may not get the discount because they do not know that they are entitled to it. The Government will know which people are receiving the warm home discount and which people are on a means-tested benefit and are not receiving it. Will she consider writing to those families to make sure that everybody knows the good news that this Government are putting more money into their pockets?

I thank my hon. Friend for the work he has been doing to champion this agenda. I can confirm that we will be writing to all households in receipt of means-tested benefits to let them know that they are eligible for the discount. For the vast majority, it will be automatic; they will not have to do anything, and the discount will turn up as a credit on their bills. There is a bit of action to take for people who are not the bill payer. We will get the message out that they must ensure that they are included as the bill payer in order to get the automatic support.

Thousands more of my constituents in Glasgow will have money off their energy bills this winter as a result of this Labour Government’s decision. I welcome the Minister’s statement and ask her to assure me that the Government will continue to work hard to deliver lower energy bills for families in Glasgow.

I can commit to that. The Conservatives tell us that our fight to deliver clean power and our work to upgrade people’s homes is ideological. It is not ideological; it is down to bread and butter issues. We know that there are families struggling across the country. We were not willing to accept what we inherited as the status quo, so we are getting on with the job of reducing energy bills, because improving living standards and delivering the change we were elected to deliver is a core priority for this Government.

The Minister is right that because the Conservatives left our country exposed to fossil fuel prices, people’s wages are being swallowed up by energy costs. It is right that we are sprinting towards clean, home-grown energy as a long-term solution, and the tensions in the middle east demonstrate why that is so important. We must also get support to people right now in Bournemouth East. I welcome the fact that 220,000 families across the south-west, including my constituents, will benefit from help this winter, but my constituents want to feel a bit of breathing room—to live, not merely survive. Will the Minister confirm that tackling the cost of living is our No. 1 priority as a Government, and set out the ways in which the Government are targeting the cost of living crisis?

My hon. Friend is absolutely right to talk about the cost of living. He is also right to point out that we have huge exposure to global fossil fuel markets, and at a point where we are seeing tensions and conflict in the middle east, energy security becomes so critical. So we will continue, despite the naysayers on the Opposition Benches, to sprint to deliver clean power, but while we do that we are taking action to reduce the cost of living. So, whether it is the expansion of the warm home discount, or the expansion of free school meals, or increasing the national living wage, or the action that we are taking to roll out breakfast clubs, or the action that we are taking to build record amounts of social housing, the Labour Government are committed to bettering living standards—not talking about it, but getting on and delivering the change that we were elected to deliver.

Many families in Portsmouth North continue to face pressure from energy bills and the cost of living, so I congratulate my hon. Friend and the Government on supporting those on the lowest incomes this winter, particularly through the change in the warm home discount, the £150 credit, the warm homes plan and the additional funds that we have given to the household support fund, helping people like Portsmouth North resident Amee, who I met yesterday and who lost out under the last Government’s unnecessary, unreliable and unfair criteria. Will the Minister join me in urging that—alongside our Government—energy providers and councils, including Portsmouth city council, do more to promote and advertise what residents must do to access these vital supports to raise their living standards, so that families who are entitled to it get the help that they need?

My hon. Friend is absolutely right. There is a clear obligation on energy suppliers to do everything that they can to support vulnerable households. I meet with suppliers regularly to emphasise that people are under pressure and that they absolutely must discharge their obligations. My hon. Friend is also right to point out that we have to work with local government, regional government and partners on the ground to ensure that the support that is available—we will continue building on that support—gets to the people that absolutely need it.

I thank the Minister for her statement, which will help a quarter of a million households in the east of England. May I say, from a personal point of view, it is so encouraging to hear a Government focused on green energy solutions? Believe it or not, Madam Deputy Speaker, it is over 30 years since I was at school, learning about the importance of green energy—[Interruption.] I know. Will she reflect on the decisions that this Government are making, including removing the ban on onshore wind, and how they will continue to benefit residents in my constituency of Harlow?

I cannot believe it was 30 years ago that my hon. Friend was learning about green energy. We have been sprinting to deliver clean power. When we came into government we set a mission to do it by 2030. There were naysayers, and there continues to be naysayers, but we were not deterred by that. So whether it is removing the ban on onshore wind, whether it is record investment in nuclear, or whether it is a record renewables auction, we are very clear that we are putting in the investment—we are putting in the hard yards, the hard graft—to deliver clean power. Why are we doing that? Not because of ideology, but because we recognise that we inherited an energy system that was not working on behalf of consumers. We recognise that people were under huge pressure—a status quo that we were not willing to accept. We will deliver clean power, so that we can bear down on bills and ensure that we drive down energy bills for good.

That is the end of the statement, so I will allow the Front Benches a few moments to shuffle over as we continue the business for the rest of the afternoon.