energy costs – Page 2 – The NEN

UK Government outlines plans to help cut energy bills for businesses

Support for households, businesses and public sector organisations facing rising energy bills has been unveiled

New government scheme will see energy prices for non-domestic energy customers such as businesses, charities and public sector organisations cut – protecting them from rising energy costs
government work with suppliers will reduce wholesale energy costs – and the significant rises in bills that businesses have seen
this support is in addition to the Energy Price Guarantee for households, with further measures today to strengthen support for families across the United Kingdom, including those in rentals or park homes

New support for households, businesses and public sector organisations facing rising energy bills in Great Britain and Northern Ireland has been unveiled by Business Secretary Jacob Rees-Mogg today (Wednesday 21 September) – supporting growth, preventing unnecessary insolvencies and protecting jobs.

Through a new government Energy Bill Relief Scheme, the government will provide a discount on wholesale gas and electricity prices for all non-domestic customers (including all UK businesses, the voluntary sector like charities and the public sector such as schools and hospitals) whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.

It will apply to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts. It will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial 6 month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the Energy Price Guarantee for households, customers do not need to take action or apply to the scheme to access the support. Support (in the form of a p/kWh discount) will automatically be applied to bills.

To administer support, the government has set a Supported Wholesale Price – expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter – which is a discounted price per unit of gas and electricity.

This is equivalent to the wholesale element of the Energy Price Guarantee for households. It includes the removal of green levies paid by non-domestic customers who receive support under the scheme.

The level of price reduction for each business will vary depending on their contract type and circumstances:

non-domestic customers on existing fixed price contracts will be eligible for support as long as the contract was agreed on or after 1 April 2022. Provided that the wholesale element of the price the customer is paying is above the Government Supported Price, their per unit energy costs will automatically be reduced by the relevant p/kWh for the duration of the Scheme. Customers entering new fixed price contracts after 1 October will receive support on the same basis
those on default, deemed or variable tariffs will receive a per-unit discount on energy costs, up to a maximum of the difference between the Supported Price and the average expected wholesale price over the period of the Scheme. The amount of this Maximum Discount is likely to be around £405/MWh for electricity and £115/MWh for gas, subject to wholesale market developments. Non-domestic customers on default or variable tariffs will therefore pay reduced bills, but these will still change over time and may still be subject to price increases. This is why the government is working with suppliers to ensure all their customers in England, Scotland and Wales are given the opportunity to switch to a fixed contract/tariff for the duration of the scheme if they wish, underpinned by the government’s Energy Bill Relief Scheme support
for businesses on flexible purchase contracts, typically some of the largest energy-using businesses, the level of reduction offered will be calculated by suppliers according to the specifics of that company’s contract and will also be subject to the Maximum Discount

A parallel scheme, based on the same criteria and offering comparable support, but recognising the different market fundamentals, will be established in Northern Ireland.

If you are not connected to either the gas or electricity grid, equivalent support will also be provided for non-domestic consumers who use heating oil or alternative fuels instead of gas. Further detail on this will be announced shortly.

We will publish a review into the operation of the scheme in three months to inform decisions on future support after March 2023. The review will focus in particular on identifying the most vulnerable non-domestic customers and how the government will continue assisting them with energy costs.

Prime Minister Liz Truss said: “I understand the huge pressure businesses, charities and public sector organisations are facing with their energy bills, which is why we are taking immediate action to support them over the winter and protect jobs and livelihoods.

“As we are doing for consumers, our new scheme will keep their energy bills down from October, providing certainty and peace of mind.

“At the same time, we are boosting Britain’s homegrown energy supply so we fix the root cause of the issues we are facing and ensure greater energy security for us all.”

Chancellor Kwasi Kwarteng said: “We have stepped in to stop businesses collapsing, protect jobs, and limit inflation.

“And with our plans to boost home-grown energy supply, we will bring security to the sector, growth to the economy and secure a better deal for consumers.”

Business Secretary Jacob Rees-Mogg said: “We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.

“The help we are already putting in place will save families money off their bills, and the government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.

“This, alongside the measures we are taking to boost the amount of domestic energy we produce to improve both energy security and supply, will increase growth, protect jobs and support families with their cost of living this winter.”

Kate Nicholls, CEO of UKHospitality said: “This intervention is unprecedented and it is extremely welcome that government has listened to hospitality businesses facing an uncertain winter.

“We particularly welcome its inclusiveness – from the smallest companies to the largest – all of which combine to provide a huge number of jobs, which are now much more secure.

“The government has recognised the vulnerability of hospitality as a sector, and we will continue to work with the government, to ensure that there is no cliff edge when these measures fall away.”

Support for households in Great Britain and Northern Ireland

Today’s announcement follows the launch of the Energy Price Guarantee for households in Great Britain, under which a typical household will pay on average £2,500 a year on their energy bill for the next two years from 1 October.

The scheme limits the price suppliers can charge customers for units of gas and electricity, taking account of the Exchequer temporarily funding for two years environmental and social costs, including green levies – worth around £150 – which are currently included in domestic energy bills. The guarantee supersedes the existing price cap and is expected to save the average household £1,000 a year based on current energy prices from October.

It also comes in addition to the announced £400 energy bills discount for all households and together, they will bring costs close to where the energy price cap currently stands.

Today, the Business Secretary also confirmed equivalent support for households in Northern Ireland. The Northern Ireland Energy Price Guarantee will offer households the same level of gas and electricity bill support as the equivalent scheme in Great Britain.

Households in Northern Ireland will also receive a £400 discount on bills through the Northern Ireland Energy Bills Support Scheme (NI EBSS), the same support as is available in Great Britain.

For the Energy Price Guarantee, the scheme will still work through electricity and gas bills. The scheme will provide households in Northern Ireland with equivalent financial support with their electricity and gas bills as for those in Great Britain. Energy suppliers will reduce bills by a unit price reduction of up to 17p/kWh for electricity and 4.2p/kWh for gas, and there is no need to take any action to receive this support.

This will take effect from November, but the government will ensure households receive support so they will see the same benefit overall as those households in Great Britain backdating support for October bills through bills from November.

Targeted support

The government also announced today further details on the separate Energy Bills Support Scheme (EBSS) to ensure that the £400 discount to households starting from October will also be available to the 1% of households who would not otherwise have received this support.

Additional funding will be made available so that £400 payments will be extended to include people such as park home residents and those tenants whose landlords pay for their energy via a commercial contract. The government is committed to ensuring such households receive the same support for their energy bills. The government will introduce legislation to make sure landlords pass the EBSS discount on to tenants who pay all-inclusive bills.

The government will also provide an additional payment of £100 to households across the UK who are not able to receive support for their heating costs through the Energy Price Guarantee. This might be because they live in an area of the UK that is not served by the gas grid and is to compensate for the rising costs of alternative fuels such as heating oil.

A-Z Guide on how to save energy in your home

AFTER weeks of growing pressure, the Government has finally announced it will step in to help households and businesses from soaring energy prices.

Under new plans announced by Liz Truss, a freeze will protect tens of millions from bills hitting unmanageable levels.

But the policy, the first major move of Ms Truss’ premiership, comes at a cost. Not just will the Government have to find an estimated £150bn to fund the scheme. There are also fears that many energy providers could look to ration fuel if households don’t reduce their usage over the Winter.

Over the last few weeks, we’ve been bombarded with advice on how to save money on our bills.

Here energy saving expert Jonathan Rolande, from House Buy Fast, condenses them into a brilliant a-z guide which could help households to save thousands of pounds a year.

Jonathan said: “The reality is the full impact of the cost of living crisis is yet to kick in and the full impact of the squeeze will probably be most acutely felt in the next few weeks.

“But there are steps you can take to save money which, if you introduce now into your daily lives, can also help you save money for the rest of your life.”

Here’s Jonathan’s A-Z guide on saving money:

Avoid tumble dryers. They use a shocking amount of energy, and can cost upwards of £300 a year to run based on usage twice a week. You can easily work out how much it costs to run a tumble dryer yourself based on your specific model if you know the kWh. As a more cost-effective alternative consider drying clothes outside on a washing line or even investing in a heated clothes airer which usually costs around 6p an hour to run.

Bleed your radiators. Not only will it release pressure on your finances, trapped air can make your radiators less efficient, so they’ll be slower to heat up.

Draw the curtains. It sounds simple but failing to do so means you can lose a lot of heat at night in every room.

Dusty condensing coils behind your fridge and freezer, which are used to cool and condense, can trap air and create blockages. This is not what you want. Keep them clean and they’ll stay cool and use less energy.

Exhaust fans around the home cost a fortune. Turn off kitchen or bath exhaust fans as soon as possible after you’ve used them.

Fill it up. Don’t worry I’m not referring to the petrol tank. Fill up the washing machine and dishwasher. Research by Thames Water and Gov.uk recently found that 68 per cent of households are only putting the dishwasher and washing machine on when they are completely full in a bid to save energy. It is a savvy move to wait until a washing machine or dishwasher is full as the appliances will use the same amount of energy to clean fewer items. So it’s smarter to wait to do fewer washes with more items, than waste energy on more half full washes.

Going away on holiday or a business trip? Make sure to turn off your water heater while you are gone. Otherwise it will keep heating the water in a “standby mode” costing you money in the process.

Hive is, in my opinion, the best energy saving app on the market right now. Use the app to keep track of what’s happening at home and set schedules or switch any home electrical device on or off rather than leaving them on standby.

Insulate your loft. I know it’s probably a job you’ve had on the to-do list for a long-time but now is the perfect moment. You can save hundreds of pounds a year by creating better insulation up there.

Things may be tight, but consider treating yourself to a jacket – for your boiler… The best come with a recommended thickness of 75mm and help keep your water hotter for longer and reduce your energy bills. A new one is easy to fit – the materials will only cost you about £25 and it could save upwards of £100-£150 a year.

The kitchen is a great place to cook up money saving methods. Consider using slow cookers and pressure cookers during the spending squeeze. They are more economical and you can batch cook dishes like stews, curries and soups that will last for days.

Loft hatches are the forgotten item when it comes to energy saving plans. Attach insulation to the top of it and create a seal with draught proofing around the perimeter. So many people spend a huge amount insulating their lofts, but neglect the loft hatch completely meaning lots of heat escapes up through the hatch. If you are looking for a really simple way to save energy in the home, then ensuring the loft hatch is adequately insulated and draught proofed is a great way to get started.

My Earth App is one of my favourite go-to apps at the moment. Originally created by researchers and students at the University of Wisconsin-Madison School of Human Ecology, the app is designed to help you keep track of your personal energy usage, your savings and your total impact. The app contains five main categories: electricity, recycling, travel, food and usage. It includes day-to-day activities to measure how environmentally friendly your actions are. These activities can range from small measures like recycling your glass bottles to larger tasks like switching your appliances with energy-efficient replacements. It also includes a diary for users to check off their activities and lets you visualise how small steps can add up to a bigger impact environmentally.

Nighttime rates are a must during this ongoing credit crunch. A few energy providers charge less for using electricity at certain times of day or night). These off-peak hours tend to be quieter periods when power demand is at its lowest, for example between 8pm and 8am. The name for this type of charging approach is time of use tariffs. The amount you pay depends on the time of day you use electricity. Ask your provider.

Nothing makes life better than a brew. But don’t overfill the kettle. Boiling more water than necessary each time could save you £36 year, based on calculations from the Energy Saving Trust.

Kettles will vary in the amount of energy they use, but you can easily work out how much it costs to boil a kettle by checking the wattage and price you pay for energy per pence/kWH.

Print on both sides of paper. A friend of mine suggested this to me last year and within a few months I’d saved a packet on my printer ink costs. So many of us now work from home and most schoolchildren need to print off work. By switching your printer settings to double-side you can save money double quick.

Flick on the quickwash settingon a dishwasher. The longer washers soak plates at a lower temperature so are cheaper

Radiators are generally set too high in most homes. turn the thermostat down in unused rooms. If you lower the temperature of your radiator down by just one degree you can save £55 a year.

Showers….Look, I’m not going to force you to get in and out in four minutes. If you can, great. One minute less in the shower could save you up to £80 annually.

But there are other things you could do too – like fitting a water-efficient shower head.

The Energy Saving Trust predicts that a water-efficient shower head could save a household up to £195 a year. One minute less in the shower could save you up to £80 annually.

Modern shower heads use current-limiting technology to save up to 40 per cent water usage, while showering under normal water pressure. This will cost you around £20-£40, but will save you in the long run.

Install tap aerators. These ‘inject’ air into the water as it comes out the tap, so while it looks like there is no impact on the flow rate, a fraction of the water is used. These are especially useful if you are on a water meter.

USwitch, Compare the Market and other comparison sites are a must at the moment. Look at them regularly – once a fortnight if you can – as they will help you check to make sure you’re on the correct tariff

The vehicles we own are increasingly being powered by electricity. Aim to charge your car overnight when you could benefit from a cheaper night-time rate for your power.

Wasting power is a no-no in the current climate and leaving appliances on standby is like pouring money down the drain. It’s widely reported that the average household could be wasting as many as 7,374 hours of electricity every year when a device is left on standby.

It’s easy to do. For example, many of us disconnect our phones but leave the charger plugged in. And some devices, such as TVs, don’t have an easily accessible on-off switch.

But leaving devices on standby uses up power – sometimes known as ‘vampire energy’ – and over the course of a year it can really add up.

These are some indicative annual savings, found particularly among older devices:

· Turning off the light in an unused room – £25

· Television – £16-24

· Set-top box – £20-23

· Games devices – £16

· Smart speakers – £3.45 per speaker

· Microwave – £16

And if you’re working from home, don’t forget about office equipment:

· Printers (particularly those with LED displays) – £3-4 a year

· Laptops – £5 (but make sure you shut down and switch off rather than simply closing the lid)

X4 – that’s the amount more you pay for electric heating compared to gas. If you don’t have a choice opt for infrared or if funds allow, try and push for a heat pump – these two types of electric heating are by far the most efficient.

Yellow light bulbs and other LED saving options are just a great way of saving cash. You can save £2-3 per year for every traditional halogen bulb you switch to a similarly bright LED bulb. If the average UK household replaced all of their bulbs with LEDs, it would cost about £100 and save about £40 a year on bills.

Replacing a 50W halogen with an LED equivalent could cut your energy costs by £75 over the lifetime of the bulb – not including the price all the replacement halogen bulbs you no longer need to buy; of a typical LED costs between £2.50-12.

Zap-map is a brilliant new app. It lists and regularly updates electric charging points for cars. You can download it for free and find available charge points locally by searching the most comprehensive database of charging points, plan journeys, share updates and pay for charging on participating networks.It allows you to locate the 33,000 publicly available charging points in the UK when you are out and about, taking the stress out of electric vehicle driving.

Johnson: I’m convinced Britain’s bounceback will be golden

The months ahead are going to be tough, perhaps very tough (writes Prime Minister BORIS JOHNSON). Our energy bills are going to be eye-watering. For many of us, the cost of heating our homes is already frightening.

And yet I have never been more certain that we will come through this well – and that Britain will emerge stronger and more prosperous the other side.

Let us remember who caused this global surge in the cost of energy, and what is at stake.

Yes, we were already seeing supply chain pressures last year, caused by the aftershocks of Covid, and that was causing a rise in some global prices.

But by the end of last year we were fixing it. The world was finding the lorry drivers. The container ships were moving. We were sourcing the silicon chips.

What no one had bargained for was the decision of Vladimir Putin – and it was his decision alone – to launch a vicious and irrational attack, on February 24, against an innocent European country.

It was Putin’s barbaric invasion that spooked the energy markets.

It is Putin’s war that is costing British consumers. That is why your energy bill is doubling. I am afraid Putin knows it. He likes it. And he wants us to buckle.

He believes that soft European politicians will not have the stomach for the struggle – that this coming winter we will throw in the sponge, take off the sanctions and go begging for Russian oil and gas.

He believes we will tire of backing Ukraine and begin discreetly to encourage the Ukrainians to do a deal, however nauseating, with the tyrant in the Kremlin.

That would be utter madness. In this brutal arm-wrestle, the Ukrainian people can and will win. And so will Britain.

With every month that goes by Putin’s position grows weaker. His ability to bully and blackmail is diminishing. And Britain’s position will grow stronger.

We must and we will help people through the crisis. Colossal sums of taxpayers’ money are already committed to helping people pay their bills. That cash is flowing now – and will continue to flow in the months ahead.

Another chunk of the £650 is already due to go to the eight million most vulnerable households this autumn. There is another £300 going to pensioners in November, £150 for the disabled and £400 for all energy bill payers.

Next month – whoever takes over from me – the Government will announce another huge package of financial support. It is worth remembering why we are in a position to make these payments.

We have the cash to support families across the country because we have already proved the pessimists wrong.

I remember sitting in the Cabinet room for an economic briefing in 2020 as the waves of the pandemic broke over the world and we saw the biggest drop in output for 300 years. They told me UK unemployment would top 14 per cent.

They said that millions would be thrown on to the economic scrapheap – with all the consequent costs to the Exchequer.

They were wrong. After becoming the first country in the world to approve an effective vaccine, we staged the fastest vaccine roll-out in Europe, the fastest exit from Covid. As a result we had the fastest growth in the G7 last year and instead of mass unemployment we have about 640,000 MORE people in payrolled employment than before the pandemic began.

Instead of being at 14 per cent, unemployment is at 3.8 per cent, nearly the lowest for almost 50 years. That is giving us the fundamental economic strength to endure this crisis – as the Russian economy continues to melt down.

We are ending our dependency on Russian hydrocarbons. In June, for the first time in decades, we did not import any fuel from Russia. The UK has already stepped up production of domestic gas – 26 per cent more this year than last.

With every new windfarm we build offshore, with every new nuclear project we approve, we strengthen our strategic position. We become less vulnerable to the vagaries of the global gas price and less vulnerable to Putin’s pressure.

It is this Government that has reversed the apathy of decades and greenlighted new nuclear plants.

We are going to build a new reactor every year and will have a colossal 50 gigawatts of offshore wind by 2030 – almost half our total electricity consumption.

This British Energy Security Strategy is just a part of a vast programme to make the economy more productive and competitive.

In just three years we have increased the coverage of gigabit broadband from seven per cent of households to 70 per cent. We are strengthening the economic sinews of the country with the biggest investment in rail – three new high speed lines – for a century.

We have invested massively in skills, so that people can improve their qualifications throughout their lives.

We have taken decisive steps to make this the best place in the world to invest and start a business. We are axing dozens of burdensome EU laws – including Solvency 2 and MiFID, that acted as unnecessary deterrents to investment.

We are creating eight new free- ports, cutting taxes on investment and lengthening our lead as a science superpower – with £22billion of investment in science and a new Advanced Research agency to crack the big problems of our time, from dementia to zero carbon aviation.

All this is paying off in jobs and growth. In the first quarter of this year the UK attracted more venture capital investment in technology than China.

We have more tech investment than France, Germany and Israel combined and we produce a new billion pound “unicorn” company roughly every two weeks.

These new ideas are blooming not just in the golden triangle of Oxford, Cambridge and London but across the whole UK as we drive forward our levelling up agenda.

We have laid the foundations for long-term gains in prosperity and productivity. We know we will bounce back from the crisis in the cost of energy as we rapidly build up our own UK supplies.

That is why we will succeed and why we cannot flinch now.

If Putin is allowed to get away with his murder and mayhem, and to change the borders of Europe by force, then he will simply do it again, elsewhere on the periphery of the former Soviet Union.

Other countries will draw the lesson that violence and aggression can pay off and that will usher in a new cycle of political and economic instability.

That is why we must continue to back the Ukrainians – and their military success continues to be remarkable. Volodymyr Zelenskyy has shown his country is fundamentally unconquerable.

Now is the time for the West to double down our support, not to go wobbly.

We have more than enough resilience to get through tough months ahead. We have shown that before.

And we have made the long term decisions – including on domestic energy supply – to ensure that our bounceback can and should be remarkable and that our future will be golden.

Fraser of Allander Institute update: Energy Costs and Fuel Poverty

The week’s economic news has again been dominated by the implications of inflation, and in particular of huge increases in household energy bills.

Projections for the energy price cap have again been revised up. The latest projections indicate that the price cap could reach around £3,500 in October, and increase further to around £4,400 in April. It is incredible to think that the cap was £1,277 earlier this year (having now increased to £1,971).

Such levels of increases will have severe impacts on households. In Scotland, a quarter of households were already in fuel poverty in 2019, the year in which the Fuel Poverty (Targets, Definition, Strategy) (Scotland) Act received Royal Assent.

That Act determines that a household is in fuel poverty if two conditions hold:

First, that in order to heat the home to a satisfactory level, the household would need to spend more than 10 per cent of its net income on fuel; and
Second, if, after deducting those fuel costs, and other essential costs associated with disability, care needs or childcare, the household’s income is below 90% of the UK Minimum Income Standard.

The definition therefore is not based on what a household actually spends on fuel, but on what they need to spend to heat their home to an acceptable level.

The daunting projections for energy bills will undoubtedly lead to a substantial increase in fuel poverty throughout 2022 and 2023. Quite how many households will be in fuel poverty according to the official definition will depend in part on what further action the government decides to take. But it is clear that a broad swathe of low and middle income households will be placed under severe financial strain.

The political debates this week have again focussed both on the level and targeting of further support the government should provide.

There is a clear case for targeting. In Scotland, almost all households (96%) with incomes below £200 per week were already in fuel poverty in 2019; but amongst households whose incomes were above £500 per week, fuel poverty rates were negligible. Further targeting via the social security system therefore seems appropriate.

But it should also be remembered that the financial distress caused by the energy price crisis will extend well beyond the poorest, and further broader-based support would also be justified. This is where the delivery mechanism becomes more challenging. Government could subsidise bills universally, although this would be expensive, providing support to some households whose need for support is relatively less.

But trying to provide support to low and middle income households only is tricky. Using the council tax system is far from ideal given the weak links between council tax band and income.

Households in bands A and B are relatively more likely to be in fuel poverty, but over 14% of Scottish households in bands F, G and H were in fuel poverty in 2019. On this basis, using council tax band as a way to limit the breadth of financial support provided has clear disadvantages.

It now seems unlikely that the UK government will announce its next round of support for households until the Conservative leadership contest has concluded. Depending on the mechanisms it chooses for delivering that support, the Scottish government may be allocated additional resources of its own which it can prioritise as it deems fit, or the support may be delivered at UK level (via energy bills or the social security system).

Downing Street showdown does nothing to address energy cost fears

The Prime Minister, Chancellor Nadhim Zahawi and Business and Energy Secretary Kwasi Kwarteng met industry leaders from the electricity sector yesterday to discuss what more they can do to help people struggling with rising energy prices – but the meeting did nothing to resolve the impending crisis.

The Prime Minister, Chancellor, Business and Energy Secretary stressed the need to act in the interest of the country in the face of rising energy prices caused by Putin’s illegal invasion of Ukraine and how vital it was that the Western world continued to stand by the Ukrainian people during their battle for survival.

The Chancellor and energy firms agreed to work closely over the coming weeks to ensure that the public, including vulnerable customers, are supported as unprecedented global events drive higher energy costs.

Government support worth £37 billion is being provided this year to help people with the rising cost of living, including £1,200 for the most vulnerable households over the course of the year and £400 discounted off everyone’s energy bills from October.

It was noted that the market is not always functioning for consumers, and extraordinarily high bills will ultimately damage energy companies.

As set out in the Energy Security Strategy, the Government has launched a consultation to drive forward market reforms and ensure the market works better for consumers. Discussion focussed on how Government and industry can collectively drive forward reforms to ensure the market delivers lower prices.

The Prime Minister, Chancellor and Business and Energy Secretary emphasised the importance of investing in North Sea oil and gas, renewables, biomass and nuclear to strengthen our domestic energy security.

The Chancellor added the Government continues to evaluate the extraordinary profits seen in certain parts of the electricity generation sector and the appropriate and proportionate steps to take.

The Prime Minister set out that it will be for the next Prime Minister to make significant fiscal decisions.

Prime Minister Boris Johnson said: “Countries around the world are feeling the impact of Putin’s damaging war in Ukraine. We know that this will be a difficult winter for people across the UK, which is why we are doing everything we can to support them and must continue to do so.

“Following our meeting today, we will keep urging the electricity sector to continue working on ways we can ease the cost of living pressures and to invest further and faster in British energy security.

“We are continuing to roll out government support over the coming months, including the second £324 instalment of the cost of living payment for vulnerable households, extra help for pensioners and those with disabilities, and the £400 energy bills discount for all households.”

Chancellor of the Exchequer, Nadhim Zahawi, said: “This morning I hosted industry leaders from the electricity sector to discuss what more they can do to work with Government and act in the interest of the country in the face of rising prices caused by Putin’s illegal invasion of Ukraine.

“We have already acted to protect households with £400 off energy bills and direct payments of £1,200 for 8 million of the most vulnerable British families. In the spirit of national unity, they agreed to work with us to do more to help the people who most need it.”

The meeting was attended by representatives from:

EDF
RWE
E.ON
Drax
Orsted
Uniper
National Grid
SSE
ScottishPower
Centrica
Octopus Energy
Vitol
Intergen
Greencoat Capital
Energy UK

Scottish Government Resilience Room convened to discuss ‘cost emergency’

The First Minister chaired the Scottish Government Resilience Committee yesterday (August 11) to discuss urgent steps to mitigate the growing cost emergency which is affecting people and businesses.

Ministers assessed the current situation and likely scenarios in the months ahead and agreed a number of immediate actions. The Scottish Government will:

Continue to maximise the direct financial assistance available to those most in need, principally through ongoing work to extend eligibility for and increase the value of the Scottish Child Payment
Undertake an emergency budget review to assess any and all opportunities to redirect additional resources to those most in need, reduce the burdens on business and stimulate the Scottish economy
Consider urgently all options within devolved powers for regulatory action to limit increases in costs for people, businesses and other organisations
Bring together energy companies, banks and food retailers to examine what further help can be provided by these businesses to limit cost increases and protect those most vulnerable
Work with partners to strengthen the safety net of emergency food/fuel provision, prioritising a ‘cash first’ approach
Provide further advice to households on using energy more efficiently and reducing consumption

The Resilience Committee will meet on a weekly basis for the foreseeable future to oversee and direct progress on these immediate actions and keep under ongoing review any further steps that the Scottish Government can take.

In addition to doing everything possible within its powers, the Scottish Government is renewing its call for urgent and substantial action from the UK Government including:

An immediate doubling of the direct financial support already provided, with payments made by October. It is estimated that for an out-of-work couple with two children, the payments already announced by the UK Government fall around £1,600 short of meeting the recent changes to benefits and living costs – a gap that must be filled
Cancellation of the forthcoming increase in the energy price cap, followed by urgent work between the government and energy companies on energy market reforms and associated financing options to ensure sustainable costs for consumers in the long term
The urgent introduction of an energy price cap for Small and Medium Enterprises
Support for business to prevent closures due to energy price rises and investment in economic stimulus to minimise the scale of the projected recession
A further windfall tax to ensure nationalisation of the profits being made out of the current pressures
Additional funding to support public sector pay increases and protect the recovery of public services from the pandemic

The First Minister said: “It is clear that the UK currently faces a rapidly escalating emergency that goes beyond simply the cost of living and is now a more general cost of everything crisis. This emergency may be of a different nature to the COVID-19 pandemic, but it is on a similar scale.

“In the absence of substantial and urgent action, this emergency will cause acute deprivation and suffering. It will affect access to practical necessities for millions of people across the UK. Bluntly, it will cost lives.

“To illustrate the severity of the situation, the Scottish Government estimates that, even with current UK Government mitigations, at least 700,000 households in Scotland – 30% of all households – will be living in extreme fuel poverty by October. That number could be even higher, if the Ofgem price cap for October 2022 is above £2,800.

“It is essential, therefore, that the response from government at every level is commensurate, in scale and speed, to the nature and magnitude of the emergency.

“In developing a response, governments must first and foremost address immediate need. We must all focus on supporting individuals, businesses and jobs by addressing the principal root causes of the problem.

“Scottish Ministers are clear that the powers and resources needed to tackle this emergency on the scale required – access to borrowing, welfare, VAT on fuel, taxation of windfall profits, regulation of the energy market – lie with the UK Government. This is reflected in the actions we have proposed and set out today.

“At the same time, the Scottish Government will continue to do everything within our resources and powers to help those most affected.”

Ofgem demands improvements from energy suppliers on customer direct debits

Energy regulator Ofgem has told a number of energy suppliers to take immediate and urgent action, after a review found a range of weaknesses or failings in the way they charge customers direct debits.

Out of a total of 17 large suppliers in the market, the majority were found to only have minor issues, but five were found to have ‘moderate or severe’ weaknesses with Ofgem demanding immediate action.

This is an initial snapshot of findings and suppliers affected will now have to submit action plans within two weeks to set out how they will take the required actions, which Ofgem will scrutinise for effectiveness and comprehensiveness.

Although we have not found evidence of unjustifiably high direct debits, as an additional reassurance for consumers, the regulator will require all suppliers that increased their customers’ direct debits by more than 100% (impacting over 500,000 customers) to review them.

Where appropriate, Ofgem also expects suppliers to adjust any miscalculations, including making repayments if needed, and consider whether a goodwill payment is warranted.

The review of domestic energy suppliers found that:

Over 7 million energy consumers on a Standard Variable Tariff (SVT) saw an increase in their direct debit between February and April 2022
On average, direct debit levels for customers on an SVT increased by 62% in this period. Most of this reflects the increased cost of gas*
8% of SVT customers seeing an increase (around 500,000 households) experienced an increase of more than 100% and Ofgem is concerned by this and wants to ensure there is good reason for it (e.g., coming off an SVT, increase in energy use etc)
Evidence that some suppliers’ processes are not as robust as they could be, and that this could lead to inconsistent, incorrect or poor treatment for customers
A lack of formally documented policies and processes within some suppliers, which risks inconsistent and poor consumer outcomes.

Ofgem recognises that increases experienced by consumers will differ depending on a range of factors, and that some of these, such as recent tariff changes, high debit balances or recent meter reads, can drive large adjustments to customer direct debits.

But it is for suppliers to ensure that direct debits are set correctly based on all relevant information available, and that they clearly communicate any changes in a way that helps consumers understand their payments.

Jonathan Brearley, Ofgem CEO, said: “We know how hard it is for energy customers at the moment so it’s crucial that the amount they pay each month in direct debits is right so they can manage their money.

“Suppliers must do all they can, especially during the current gas crisis, to support customers and to recognise the significant worry and concern increased direct debits can cause.

“We know there is some excellent service out there, but we want to make sure that it’s consistent and standard across the board. It’s clear from today’s findings on direct debits that there are areas of the market where customers are simply not getting the service they need and rightly expect in these very difficult times.

“Today’s findings show that with the urgent changes we are now expecting, the current system will be much fairer for consumers. Bringing down the price of gas is not in Ofgem’s control; however, we will do all we can to have a fair system and ensure suppliers look after their customers.”

The Ofgem assessment divided supplier findings into three groups:

No significant issues (four suppliers)
Minor weaknesses (seven suppliers)
Moderate to severe weaknesses (five suppliers)

Suppliers in the first group, with no significant issues found, are British Gas, EDF, ScottishPower and SO Energy. Our review found that these suppliers generally had robust processes in place, although we did make some recommendations for improvement, and Ofgem will work with these suppliers for continuous improvement. We are asking these suppliers to review customer direct debits to ensure they are correct, as an additional assurance for consumers.

The second group, with minor weaknesses, consisted of Bulb, E.ON, Octopus Energy, Outfox the Market, Ovo, Shell and Utility Warehouse. For this group of suppliers, we identified some weaknesses or gaps in their processes that could lead to poor consumer outcomes.

Examples include lack of documented policies or guidance for staff, potentially not taking account of all relevant factors when setting customer direct debits, or risks that some customers’ direct debits are not assessed when appropriate. We have started compliance engagement with these suppliers to secure improvements.

Suppliers in the third group had moderate to severe weaknesses identified. This group includes Ecotricity, Good Energy, Green Energy UK and Utilita Energy, and covered a spectrum of weaknesses, ranging from inadequately documented or embedded processes, weak governance and controls, to an overall lack of a structured approach to setting customer direct debits.

Ofgem is concerned that in some cases this could lead to customer direct debits being set incorrectly, or not being evaluated for a long time, which can cause the build-up of either unnecessarily large credit balances or debt, depending on whether the customer is under- or overpaying.

Ofgem is starting compliance engagement with these suppliers to drive rapid and robust improvements to processes and reassess customer direct debits where necessary. If these suppliers don’t take action fast enough, Ofgem will consider enforcement action.

Also in this group, with severe weaknesses were TruEnergy and UK Energy Incubator Hub (UKEIH). In both cases we found suppliers did not have a consistent and structured approach to setting customer direct debits, and found severe concerns over the maturity of their processes, putting consumers at a serious risk of inconsistent or poor outcomes, with need for rapid and significant improvement.

To this end, we are considering whether enforcement action is warranted. Since the findings were made, UKEIH have ceased to trade and so we will not pursue any further action against them.

If Ofgem does not see swift and sufficient improvement, as well as redress for consumers where necessary, the regulator will not hesitate to initiate enforcement action against more suppliers, which can include fines, enforcement orders and banning the acquisition of new customers.

Ofgem has now instructed suppliers to:

· review the accounts of all customers whose direct debit was increased by 100% or more between 1 February and 30 April 2022, to assess whether the uplift was appropriate

· adjust any miscalculations and consider whether a goodwill payment is warranted in the circumstances

· address any process issues which may have incorrectly led to significant increases or other poor consumer outcomes, such as systemic over- or underpayment, and

· submit action plans within two weeks to set out how they will take the required actions, which Ofgem will scrutinise for effectiveness and comprehensiveness.

Journalistic website Money Saving Expert (MSE) sent Ofgem a dossier of information earlier this year on the same issue, after it was raised by consumers.

This is all part of the wider work that Ofgem is doing to make the energy market fairer, including a robust recent review into lessons learnt from Storm Arwen, a more frequent and fairer price cap, and most recently, action to improve the financial resilience of companies.

As well as reviewing supplier performance, Ofgem also recently reviewed its own performance, through a wide-ranging report led by independent auditor Oxera.

Rocio Concha, Which? Director of Policy and Advocacy, said: “The cost of living remains consumers’ number one priority, yet Which? has heard concerning stories of consumers having their energy direct debits miscalculated or increased by huge amounts, while our research shows many customers are struggling to understand their bills and pricing.

“It’s encouraging to see the regulator taking action over poor performance and Ofgem should not hesitate to impose penalties on any suppliers that fail to make the necessary improvements.

“At a time when consumers are paying more than ever before for energy, the regulator must also work with government and suppliers to explore ways of using data proactively to offer targeted support to those in most need of help before they have to turn to debt charities.

“Which? will seek to work with businesses in energy and other key sectors to find more ways to support consumers through the tough times ahead.”

Charity offers fuel grant to ex-miners

A CHARITY is offering a £200 grant to former coal miners to help them cope with the rise in fuel costs in 2022.

CISWO – the coal mining charity – has launched the scheme to provide some support towards combatting the huge hike in the energy price cap which came into effect in April.

The one-off grant will be available to former coal miners, or their partners or widows, who are identified as being particularly vulnerable due to being on a low income, live in their own home and are responsible for paying for energy costs.

It is also only available to those former mineworkers who have ten years’ service in the industry or those whose last place of work was in the industry. Only one grant is available per household.

The price rises will see millions of people having to pay around £700 more each year to heat their homes.

And with former miners often suffering from health issues, poor mobility and managing on low incomes, they may be disproportionately impacted by the changes.

Nicola Didlock, Chief Executive at CISWO, said: “We are very aware that many of our beneficiaries are vulnerable and susceptible to the cold, especially those on low incomes and trying to cope with ill-health, mobility issues and older properties to maintain.

“We want to ensure that those individuals are identified and supported to keep warm and healthy, particularly during the colder months as the energy price rise begins to impact those most affected.”

CISWO’s Personal Welfare team will be identifying people in need and supporting them to get the help they are entitled to. As well as the CISWO grant, they will help people to obtain other financial aid and subsidies from the government.

The team will also be on hand to provide information about other support on offer from CISWO for former coal miners and their dependants, including:

Confidential home visiting service
Advocacy, information, advice and guidance
Emotional support
Benefit applications
Access to mobility equipment
Reducing loneliness and isolation
Access to holidays and convalescence

For more information about claiming the £200 CISWO grant, visit:

www.ciswo.org.uk

or call 01506 635 550.

Keep cosy and save money

With home energy costs rising, many of us are worrying about our gas and electricity bills. The City of Edinburgh Council is working in partnership with Changeworks and Home Energy Scotland to help keep you and your home warm for less.

Their friendly advisors are on hand to give you:

free energy saving advice to help save money on your bills
support with fuel debt
help to find out if you’re eligible for any grants or funding for energy efficiency home improvements.

If you’re a Council tenant you can contact the Energy Advice Service for free by phoning 0800 870 8800, emailing warmth@changeworks.org.uk or visiting www.changeworks.org.uk

If you’re a home owner or private renter you can contact Home Energy Scotland for free advice on 0808 808 2282 or visit www.homeenergyscotland.org

National Energy Savings Week: Finance expert on reducing fuel usage and saving money

Personal Finance Expert at CashLady.com, Paul Wilson, shares his top tips on how Brits can reduce their fuel usage and save money this Energy Savings Week:

It looks like energy prices are likely to rise higher than ever before in 2022. Making sure you’re getting the best deal has never been more important, and taking steps to cut back your fuel usage should be on everyone’s agenda.

Even small changes can help put some money back in your pocket and big tasks, like moving to a new tariff, are worth looking into. This Energy Savings Week, why not try some of these nine ways to reduce your fuel usage and help keep your finances on track.

1. Draught excluders

Make sure your doors aren’t letting out valuable heat and letting in the cold. You can buy permanent solutions that attach to the bottom of your door, or decorative excluders that are a quick and easy option. Draught excluders are an inexpensive and effective way to quickly tackle any lost heat from your home.

2. Seal your windows

In the same vein as draught excluders, making sure your windows are sealed against the cold is a quick win. Older houses especially can have less efficient windows. Window sealing strips can be bought from most DIY stores and are available in various styles to also complement home decor. Additionally, if you have curtains, use them! Lined curtains will keep your room warm in winter and cooler in summer, meaning less need to rely on your heating or cooling systems.

3. LED Bulbs

The initial outlay may be a little steeper when it comes to LED bulbs. However, they use 75% less energy than their incandescent counterparts, so it’s a switch worth making. They also last longer and so you won’t need to buy them as often which results in long-term savings and less waste.

4. Plan and prepare

Simply being mindful of how and when you use energy can lead to some simple savings. Many of us have our heating on a timer; regularly reassess if the times you use the heating still make sense. Perhaps you still have the same settings you had over the Christmas break, but now you’re home less during the day. There may also be evenings when you’re out and don’t need the heating at all. Turn it off before you leave so you aren’t wasting unnecessary energy.

5. Be mindful

Just as you can plan and prepare when to have your heating on, you can also consider where in the house you actually need the heating. If the spare room is used for the rare times you have guests, then you can turn that radiator off and shut the door. Radiator valves are also there to be used. Smaller box rooms may be fine with a lower setting. Not everyone you live with will like the same level of heat; children’s rooms may need a lower temperature if they tend to get hot in the night. Think carefully about how you are using your heating, not just when you use it.

6. Other appliances

There are a whole host of things we use daily in our homes that burn fuel. Make sure lights are switched off when rooms are not in use, put post-it notes on the switches as a reminder if needs be. Try not to use the dryer as this is a huge energy burner, instead put clothes on radiators that are being used anyway. Washing your laundry in large loads rather than little and often is another way to be more efficient. Consider batch cooking some of your weekly meals and freezing them. That way, you’re having to cook less which means using the oven less.

7. Credit where it’s due

Find out from your energy company if you’re in credit. If you have regular meter readings and pay by direct debit, you may have been paying too much. This can result in you being in credit. You can choose to carry this credit over, which may reduce your monthly bills, or you can ask for a refund. Energy companies have to issue a refund if you are in credit and you could save this towards future bills or just put it aside for a rainy day.

8. Your tariff

Traditionally, moving onto a company’s default tariff has been the most expensive option. As soon as your fixed tariff is coming to an end, you should speak to your energy company about a new deal. However, with energy prices now so high, the capped default price may actually be cheaper than the fixed option. Do your homework and find out if you may now be better off staying with the default tariff until prices (hopefully) decrease, or if your specific usage means you would be better off with a new fixed deal.

9. Change providers

As with moving to a different tariff, switching providers is now not as cut and dried as it used to be. As many as 20 energy firms have gone bust recently, so you need to make sure you choose a provider that is stable. Use price comparison sites to see if moving companies could be a good thing, but be sure to do your sums first and don’t assume it will lead to savings. You should also only switch at the end of your contract as, quite often, firms charge an exit fee if you still have several months left on your deal.

Paul Wilson is a Consumer Finance Expert at Financial Conduct Authority authorised and regulated credit broker Cash Lady.

Record gas prices drive up price cap by £139

Customers encouraged to contact supplier for support and switch to better deal if possible

Support available for customers struggling to pay bills or in vulnerable circumstances with additional help for those on prepayment meters
Energy suppliers sign up to industry commitment to reach out to those who most need help this winter
Customers can avoid the increase by shopping around or asking their supplier to put them on a better deal

The energy price cap will increase from 1 October for the 15 million customers it protects. Those on default tariffs paying by direct debit will see an increase of £139 from £1,138 to £1277. Prepayment customers will see an increase of £153 from £1,156 to £1309.

This increase is driven by a rise of over 50% in energy costs over the last six months with gas prices hitting a record high as the world emerges from lockdown.

Surging global fossil fuel prices are already driving up inflation for consumers, making fixed rate energy tariffs not covered by the price cap, as well as petrol and diesel more expensive.

The price cap offers a safety net for customers who haven’t switched by making sure that suppliers only pass on legitimate costs.

Those on default tariffs are saving an estimated £75-£100 or £1 billion every year as a result.

Any customer in vulnerable circumstances or worried about paying their energy bill should contact their supplier to access the support available.

Customers may be eligible for extra help such as affordable debt repayment plans or payment breaks, emergency credit for prepayment meters and a £140 bill rebate under the Warm Home Discount.

Last week suppliers also signed up to an industry commitment to reach out to those who most need help this winter.

Customers can also shop around to save money before the increase takes effect on 1 October.

Those who don’t want to switch supplier or are unable to can ask their supplier to put them on a better deal.

Jonathan Brearley, chief executive of Ofgem, said: “Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.

“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.

“If you’re struggling to pay your bill you can get in touch with your supplier to access the help that’s available and if possible, shop around for a better deal.

“We have put tough rules in place to ensure suppliers treat customers who are struggling with bills fairly, and welcome their commitment to reach out to those who most need help this winter. Where help is not forthcoming, we will not hesitate to act.

“I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances.”

Ofgem adjusts the price cap twice a year based on the latest estimated costs of supplying energy.

The biggest and most unpredictable factor is the wholesale cost of electricity and gas paid by suppliers and influenced by global markets. This accounts for roughly 40% of the overall price cap level.

Gas prices have risen to a record high in Europe due to a recovery in global demand and tighter supplies. This is increasing the cost of heating homes and pushing up electricity prices.

Last winter, the level of the cap fell by £84 after passing onto customers the savings from lower wholesale energy costs as countries went into lockdown and demand fell.