What is the UK government doing to help people afford soaring Energy Bills?
The UK government has been widely criticised for its slow response to the Energy Bills crisis – and the policies it has announced to try and address the situation have been broadly slammed as ‘sticking plasters’, which do nothing to address the underlying causes, and which still leave ordinary people – and the most vulnerable – severely out of pocket.
Council Tax Rebate
In February, the government announced that all English households in Council tax bands A-D would receive a £150 rebate in order to help with soaring Energy Bills.
Energy Bill Discount
At the same time, the government also announced that all domestic energy customers in Great Britain would automatically receive a £200 discount on their Energy Bills in the autumn.
However, this discount has been widely criticised because households will have to repay it, and nobody can opt out – with an extra £40 being added to everybody’s Energy Bills over the next five years in order to pay Energy Suppliers back.
Warm Home Discount
In addition, the government has also announced an extension to the Warm Home Discount, which will rise from £140 to £150 in October. The government also claims that eligibility for the scheme will be extended to around 780,000 extra households, although it is currently unclear which households these will be.
Currently around two million households are eligible for the Warm Home Discount – with those on Pension Credit receiving it automatically. Other ‘low income households’ who receive certain benefits could also qualify, but need to apply to their Energy Suppliers in order to receive it.
However, only Energy Suppliers with more than 150,000 customers are currently mandated to take part in the scheme – meaning that many eligible households who buy their energy from smaller suppliers will miss out.
In addition, the government is reportedly set to remove eligibility to the Warm Home Discount to around 200,000 sick and disabled people – those in receipt of Disability Living Allowance (DLA), Personal Independence Payments (PIP) or Attendance Allowance (AA).
Moreover, the costs that Energy Suppliers incur for providing the Warm Home Discount to eligible customers is actually taken into account by the nationwide Energy Price Cap – meaning that those in receipt of the discount are actually still paying for a percentage of the scheme in higher bills.
How will the government’s policies help ordinary people in practice?
Energy Bills are set to rise by £833 a year on average, and even if you are eligible for all three schemes, it will only cut around £500 off your bill in the short term, and just £300 in the longer term – leaving even the most vulnerable people down by around £530 in the long term.
However, the majority of Brits will only be eligible to two of the schemes – the £150 Council Tax Rebate and the repayable £200 Energy Bill discount – leaving the average household out of pocket by almost £700 a year in the long term compared to 2021.
