Governments sets out further details of Energy Bills Support Scheme

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energy bills and £20 notes for payment
© Maisna

The UK government has set out further details of the Energy Bills Support Scheme where millions of households will be eligible to receive a non-repayable discount of £400 on their energy bills this winter

The Energy Bills Support Scheme discount, equating to £400, will be administered by energy suppliers and paid to consumers over a 6-month period. Payments will start from October 2022.

Business and energy secretary Kwasi Kwarteng said: “People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.

“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.”

Chancellor of the Exchequer, Nadhim Zahawi, said: “We know that people are struggling with rising energy prices which is why we have taken action with support over the winter months to help ease the pressure on household budgets.

“This £400 off energy bills is part of our £37 billion of help for households, including 8 million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.

“We know there are tough times ahead and we will continue to do everything in our power to help people.”

When will the £400 energy discount be applied?

The non-repayable discount will be provided on a monthly basis.

A discount of £66 will be applied to energy bills in October and November, rising to £67 each month from December through to March 2023.

If you are to move home during the 6-month period you will still benefit from the relevant portion of the total £400.

The discount also applies to students and other tenants renting properties with domestic electricity contracts. Landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.

How will the £400 energy discount be applied?

  • Direct Debit customers will receive the Energy Bill discount automatically as a deduction to the monthly Direct Debit amount collected, or as a refund to the customer’s bank account following Direct Debit collection during each month of delivery
  • standard credit customers and payment card customers will see the Energy Bill discount automatically applied as a credit to standard credit customers’ accounts in the first week of each month of EBSS delivery, with the credit appearing as it would if the customer had made a payment
  • smart prepayment meter customers will see the Energy Bill discount credited directly to their smart prepayment meters in the first week of each month of delivery
  • traditional prepayment meter customers will be provided with redeemable EBSS Energy Bill discount vouchers or Special Action Messages (SAMs) from the first week of each month, issued via SMS text, email or post. Customers will need to redeem these at their usual top-up point

Who is eligible for the Energy Bills Support Scheme and what is included?

Households most in need will be eligible for further support in addition to the Energy Bill discount. This includes:

  • a £650 one-off Cost of Living Payment for around 8 million households on means tested benefits
  • a £300 one-off Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment
  • a £150 one-off Disability Cost of Living Payment for around six million people across the UK who receive certain disability benefits
  • a £500 million increase and extension of the Household Support Fund available to councils to support vulnerable households with the cost of essentials such as food, utilities and clothing

Greg Hands Energy Minister said: “We have set out how the government will deliver discounts to help 29 million households with their energy bills this winter.

“I encourage families across the country to engage with these plans and particularly those customers on traditional prepayment meters who need to take action.

“Coupled with world-leading action to radically enhance our home-grown energy security, we will continue to be on the side of British consumers now and into the future.”

Lord Callanan, energy and business minister, said: “This is a challenging time for many amidst the rising cost of living, which is why the government is stepping in with direct support.

“From delivering discounted energy bills throughout the winter months to launching a new website providing homeowners with help to make homes cheaper and warmer, we want to make sure UK residents have the information they need to access all the support that is on offer.”

Further funding will be available to provide equivalent support of £400 for energy bills for the 1% of households who will not be reached through the EBSS. This includes those who do not have a domestic electricity meter or a direct relationship with an energy supplier, such as park home residents.

Fraud prevention

‘No household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report these to the relevant authorities where they are suspected.’

‘Suppliers will be expected to report to government action they are taking to ensure the support has been passed onto consumers, including notifying customers in writing they have received the £400 Energy Bill discount from HM Government, and ensuring it is clearly shown on bills or statements for Direct Debit and credit customers.’

BP announces record quarterly profit

Today (2nd August) BP announced its highest record quarterly profit in 14 years while at the same time typical household energy bills have been forecast to hit more than £3,600 a year this winter.

Responding to the profit announcement Harriet Lamb, CEO of Ashden, said:

“BP is the latest in a run of oil super majors declaring unthinkable bonanza profits,

“These profits are unsound, unethical and economically disastrous for the country as a whole. They underline why our dependence on fossil fuel giants must be ended. They are benefiting from record-breaking profits while ordinary people face record-breaking and life-destroying energy bills.

“When the average bill is likely to increase by over £3600, a £400 discount won’t even touch the sides of people’s bank accounts.  In less than 3 months, a typical energy bill will cost a third of the state pension. But where is the government’s plan? We need a rapid detox from fossil fuels.

“A double-pronged strategy is now needed by government – to take a stand against such massive profiteering and enforce a much bolder windfall tax than was implemented in May that re-directs excess profits into emergency funding for scaling up domestic energy efficiency measures, and trainin of workers to undertake a UK-wide retrofit revolution in order for people to be less dependent on fossil fuels.”

“If this action is not taken, the government will be guilty of a dereliction of duty. It has a duty of care to support citizens to have decent and affordable living conditions and allowing the fossil fuel companies to enjoy such profits knowing that it will push people into crisis, is plain wrong.”

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