New plans to improve the lives of disabled people have been set out by the Government today (Tuesday 18 July).
Government launches consultation on Disability Action Plan, which brings together ideas and action across Government to make disabled people’s lives easier
Plans include raising awareness of life-changing tech for disabled people, mandatory disability awareness training for taxi drivers, autism-friendly programmes for cultural and heritage sites
Plans designed by Ministers to make the UK a more inclusive society in the long term
Immediate and practical measures proposed in the fully accessible consultation include ensuring businesses are aware of disabled people’s needs – including Guide Dog access needs – to allow all disabled people to live, work and shop freely and support for local authorities to ensure the playgrounds they build or refurbish are accessible for disabled children.
The proposals will inform the Government’s Disability Action Plan later this year, laying the foundations for longer term change.
Other measures in the proposed Plan include:
– Raising the profile of assistive technology to ensure more disabled people have access to life-changing tech
– Legislating for mandatory disability awareness training for taxi and private hire drivers to unlock greater travel freedom for disabled people
– Encouraging more autism-friendly programmes in the cultural and heritage sectors to drive greater inclusivity
– Improving reasonable adjustments in the courts system so more disabled people can be on juries improving diversity and breadth of experience
– Implementing the British Sign Language (BSL) GCSE, over a year after the BSL Act was introduced, giving thousands of pupils communication and visual memory skills that will be an advantage to them for the rest of their lives
– Exploring the feasibility of Great Britain hosting the Special Olympics World Summer Games in 2031.
The Disability Action Plan sits alongside the Government’s National Disability Strategy which sets out our longer-term vision to improve disabled people’s lives for the better.
6.6927 Disability Unit branding
Minister for Disabled People, Health and Work, Tom Pursglove MP, said: “Our Disability Action Plan will lay out practical measures we can implement here and now to improve the lives of disabled people.
“From leading the way globally with assistive technology to improving inclusivity and accessibility across sport, travel and culture, the Plan will also be important in setting the stage for longer term change.
“We want disabled people to be at the heart of decision making and I would encourage anyone interested to respond to this consultation so the views of disabled people across the country are front and centre of our final Disability Action Plan.”
The Plan builds on the Government’s achievements over the last year on education, work, leisure, and rights for disabled people. This includes supporting the passage of landmark legislation: the Down Syndrome Act and British Sign Language (BSL) Act – and a consultation to support the introduction of a new BSL GCSE.
The overarching focus on disability has also ensured over 2,000 miles of King Charles III England Coast Path is accessible, while the government has delivered an additional £1 billion for the education of children and young people with more complex needs.
The consultation will run for 12 weeks and be open for anyone to comment. This will ensure the Plan is informed by the experience and views of disabled people, disability organisations and charities as well as other interested parties.
Chair of the Disability Unit West Midlands Regional Stakeholder Network, Louise Mckiernan said: “I welcome the Government’s commitment to their new Disability Action Plan and their intention to take immediate and practical actions to improve the lives of disabled people across the UK.
The launch of this consultation is an important opportunity for disabled people in particular to have their say and to help shape the Government’s short-term plans.
“I would encourage as many disabled people, disability organisations and other interested parties as possible to take part in this consultation exercise to ensure their voices are heard.”
Students and taxpayers will be better protected against rip-off degree courses that have high drop-out rates, don’t lead to good jobs and leave young people with poor pay and high debts, the Prime Minister and Education Secretary have announced.
Under the plans, the Office for Students (OfS) will be asked to limit the number of students universities can recruit onto courses that are failing to deliver good outcomes for students.
The UK has some of the world’s leading universities, but a minority of the courses on offer leave students saddled with debt, low earnings and faced with poor job prospects. The government wants to make the system fairer for them, but also for taxpayers – who make a huge investment in higher education and are liable for billions of pounds in unrecovered tuition fees if graduate earnings are low.
Figures from the Office for Students show that nearly three in ten graduates do not progress into highly skilled jobs or further study 15 months after graduating. The Institute for Fiscal Studies also estimates that one in five graduates would be better off financially if they hadn’t gone to university.
The government wants to make sure that universities and colleges are offering the same standard of high-quality provision expected in our schools, and that young people are encouraged to choose the path that is right for them – whether it’s a university degree, a higher technical qualification, or an apprenticeship.
As part of today’s announcements, the government will also reduce the maximum fee that universities can charge for classroom-based foundation year courses to £5,760 – down from £9,250 currently.
These are an additional year of study designed to help prepare students for degrees with specific entry requirements or knowledge, such as in medicine and veterinary sciences. However, research shows that too many people are encouraged to take a foundation year in some subjects like business where it is not necessary.
The Office for Students will also continue work to make it easier for students to assess the quality of each university course, including its earnings potential, so that they can make the most informed decision about where and what to study. We are asking the Office for Students to ensure that courses which fail to deliver good earnings are subject to stricter controls.
Prime Minister, Rishi Sunak, said: The UK is home to some of the best universities in the world and studying for a degree can be immensely rewarding.But too many young people are being sold a false dream and end up doing a poor-quality course at the taxpayers’ expense that doesn’t offer the prospect of a decent job at the end of it.
“That is why we are taking action to crack down on rip-off university courses, while boosting skills training and apprenticeships provision. This will help more young people to choose the path that is right to help them reach their potential and grow our economy.”
Education Secretary Gillian Keegan said: “Students and taxpayers rightly expect value for money and a good return on the significant financial investment they make in higher education.
“These new measures will crack down on higher education providers that continue to offer poor quality courses and send a clear signal that we will not allow students to be sold a false promise. Wherever they choose to study, it is vital students can gain the skills needed to get great jobs and succeed – supporting the Prime Minister’s priority to grow our economy.”
Philip Augar, chair of the independent Review of Post-18 Education and Funding, said: “This is another strong signal for universities to control such recruitment as is not in students’ best interests and I hope the sector responds constructively.
Edward Peck, Vice-Chancellor and President Nottingham Trent University and panel member of the independent Review of Post-18 Education and Funding, said: “Following careful consideration and extensive consultation, the reform agenda for higher education being pursued by Government is consistent with the approach articulated in the Augar Review.
“The alignment of the fee for Foundation Years with that of Access to HE for lower cost subjects is in the interests of students as is the proposition that the future refinement of the quality framework deployed by the Office for Students, including potential selective student number controls, should make subject appropriate use of graduate salaries.”
Baroness Alison Wolf, panel member of the independent Review of Post-18 Education and Funding, said: “I am delighted that the government has introduced reforms for foundation year courses, whose current meteoric growth is hard to justify educationally or in cost terms.
“Aligning their fees explicitly with college-based access courses should also promote the greater alignment of further and higher education to which the government is, rightly, committed.”
The government has already taken decisive steps to make sure young people and adults can access more high-quality training opportunities.
This includes rolling out new T Levels, Higher Technical Qualifications, establishing a network of 21 Institutes of Technologyand working with employers of all sizes to create more apprenticeships in a wider range of exciting roles. Plans to expand UCAS to allow students to apply for apprenticeships alongside traditional degree have also been announced so thousands more young people can benefit from a wider choice of high-quality options.
Alongside the measures announced today to boost the quality of higher education, the government is going further still to support people and employers to take advantage of the wide range of free training options available to them, helping to fill skills gaps, get people into work and support the Prime Minister’s priority of growing the economy.
This includes launching a new digital platform from the autumn where people and employers can search for everything from apprenticeships and T Levels to Skills Bootcamps and essential skills courses – all in one place.
The government is also making it easier for employers to take on apprentices. This includes by cutting the steps needed to register to take on an apprentice by a third and updating 100 apprenticeships in sectors such as construction and healthcare so they reflect the latest technological advancements and so they work better for employers and apprentices.
Anthony Impey, Chief Executive of Be The Business, said: “Small businesses are run by some of the country’s most impressive and resilient people, but they are time poor and lack the resources of their peers in much larger companies.
“So these changes will make a real difference in opening up apprenticeships at a time when small businesses are looking for all the help they can get to boost their productivity.”
FD Works, Top 50 SME apprentice employer and accountancy firm based in Bristol said: “At FD Works, we believe that the power of apprentices is unmatched. The passion and perspective they bring have been a huge part of our ongoing success, but as a small business, our time is incredibly valuable.
“The investment far outweighs the cost already, but the Department for Education is continuously improving the system with us in mind, which is clear in this latest update.
“As an innovative company, we’re really excited to see changes happening that will help us move quicker, share more opportunities, and empower even more apprentices to find a career they love.”
Jane Gratton, Head of People Policy, British Chambers of Commerce said: “Apprenticeships are key to boosting technical skills in the workforce and helping firms tackle skills shortages.
“However, many firms with great apprenticeship opportunities have found the process difficult. So it’s good to see Government taking steps in the right direction to reduce the complexity and excess bureaucracy in the apprenticeship system.
“We also need more candidates to choose the apprenticeship route to employment and so we welcome initiatives that raise awareness and help match people to the great jobs and training available in local business communities throughout the country.”
Business and Trade Secretary Kemi Badenoch has formally signed the treaty to accede to CPTPP trade group in New Zealand this morning
Business and Trade Secretary Kemi Badenoch formally signed the treaty confirming the UK’s accession to CPTPP – the Indo-Pacific trade bloc now worth £12 trillion in GDP – in New Zealand today [Sunday 16th]
To celebrate this huge moment, the Government released new figures showing CPTPP-owned businesses employed one in 100 UK workers, with membership expected to turbocharge investment in the UK even further
British whisky and cars amongst 99% of current UK goods exports to CPTPP set to be eligible for zero tariffs as UK businesses given unparalleled access to market of over 500 million people
Business and Trade Secretary Kemi Badenoch has formally signed the treaty to accede to CPTPP trade group in New Zealand this morning [Sunday], kickstarting the UK’s membership of a modern and ambitious trade deal spanning 12 economies across Asia, the Pacific, and now Europe.
The Secretary of State is in Auckland to put pen to paper on this ‘mega deal’, alongside New Zealand Trade Minister Damien O’Connor, Canadian Trade Minister Mary Ng, Japanese Minister for Economic Revitalisation Goto Shigeyuki and Australian Deputy Trade Minister Tim Ayres.
The signature is the formal confirmation of agreement for the UK to join the group, following substantial conclusion of negotiations earlier this year. The Government will now seek to ratify the agreement, which will include parliamentary scrutiny, whilst other CPTPP countries complete their own legislative processes.
The signing comes as a new government report reveals one in every 100 UK workers was employed by a business headquartered in a CPTPP member nation in 2019, equating to over 400,000 jobs across the country.
Membership of the trade group is expected to spark further investment in the UK by CPTPP countries, already worth £182 billion in 2021, by guaranteeing protections for investors.
Ian Stuart, CEO at HSBC UK, said: “The UK’s formal accession to CPTPP marks a significant milestone for UK trade, enabling ambitious British businesses to connect with the world’s most exciting growth markets for start-ups, innovation and technology.
“At HSBC UK, we are incredibly excited about the opportunities this agreement presents; as the world’s leading global trade bank we will support UK businesses to achieve their full potential and open up a world of opportunity.”
Cath White, Head of International at Belvoir Farm said: “The UK’s accession to CPTPP will mean more than 99% of UK goods exported to CPTPP member countries will be eligible for zero tariffs.
“It will also ease administrative and commercial trade barriers to allow talented and passionate UK producers to tell their story on a worldwide scale.
“At Belvoir Farm, we export 20% of our turnover to markets across the globe, with one third of exports bound for Indo-Pacific markets, including Australia, New Zealand, Japan and Singapore. This is a fantastic opportunity to grow British brands, especially this year when the spotlight is on the UK.”
Ian Galbraith, Group Strategy Director at Mott MacDonald, said: “Mott MacDonald is strongly supportive of UK accession to CPTPP and proud to have been part of the technical board advising the British negotiating team.
“The Partnership’s ambitious services and procurement chapters pave the way for greater recognition of professional competence in engineering and architecture, and establish open, fair and transparent competition rules in government procurement, allowing world-leading firms like Mott MacDonald to win and service new contracts across the many countries covered by CPTPP.”
Speaking ahead of the signing, Kemi Badenoch said:“I’m delighted to be here in New Zealand to sign a deal that will be a big boost for British businesses and deliver billions of pounds in additional trade, as well as open up huge opportunities and unparalleled access to a market of over 500 million people.
“We are using our status as an independent trading nation to join an exciting, growing, forward-looking trade bloc, which will help grow the UK economy and build on the hundreds of thousands of jobs CPTPP-owned businesses already support up and down the country.”
The report found CPTPP investment accounted for:
Over £240 billion in turnover in London, £35 billion in the South East and £18 billion in the East of England
The creation of 26,000 jobs in 2021 and 2022
75% of all employment in CPTPP-owned businesses was outside of London
One in 50 jobs in the North East
One in every 25 jobs in the manufacturing sector
The report also found that CPTPP companies punch above their weight economically. While they account for 0.3% of all businesses in the UK, they generate 6.1% of the UK’s total turnover – 20 times higher than the proportion of businesses they represent.
The UK will be the first European member and first new member since CPTPP was created, which would have been impossible had we remained in the EU. With the UK as a member, CPTPP will have a combined GDP of £12 trillion and account for 15% of global GDP.
The UK Government will now take the steps needed to bring the agreement into force, expected to be next year.
Being part of CPTPP will mean that more than 99 per cent of current UK goods exports to CPTPP countries will be eligible for zero tariffs.
Dairy farmers, for example, will benefit from reduced tariffs on cheese and butter exports to Canada, Chile, Japan and Mexico. This builds on the £23.9 million worth of dairy products we exported to these countries in 2022.
The UK Government says the agreement is a gateway to the wider Indo-Pacific which is set to account for the majority of global growth and around half of the world’s middle-class consumers in the decades to come, bringing new opportunities for British businesses and supporting jobs.
Polluters to face unlimited penalties in England and Wales
New laws will scrap the cap on civil penalties and significantly broaden their scope to target a much wider range of environmental offences
Those that pollute the environment will face unlimited penalties under new legislation announced today by the UK government (Wednesday 12 July).
The current limit of £250,000 on variable monetary penalties that the Environment Agency and Natural England can impose directly on operators will be lifted, following a government consultation which received widespread public support.
This will offer regulators a quicker method of enforcement than lengthy and costly criminal prosecutions – although the most serious cases will continue to be taken through criminal proceedings.
New powers will also enable these higher penalties to be levied as a civil sanction for offences under the Environmental Permitting (England and Wales) Regulations 2016, the regime under which the majority of Environment Agency investigations take place.
This will ensure regulators have the right tools to drive compliance across a range of sectors, strengthening enforcement and holding all who hold environmental permits – from energy and water companies to waste operators and incinerators – to greater account.
Environment Secretary Thérèse Coffey said: “Polluters must always pay. We are scrapping the cap on civil penalties and significantly broadening their scope to target a much wider range of offences – from breaches of storm overflow permits to the reckless disposal of hazardous waste.
“It builds on action being taken right across government to stand up for our environment – tackling pollution, protecting delicate ecosystems and enhancing nature.”
Minister for Environmental Quality and Resilience Rebecca Pow said: “By lifting the cap on these sanctions, we are simultaneously toughening our enforcement tools and expanding where regulators can use them.
“This will deliver a proportionate punishment for operators that breach their permits and harm our rivers, seas and precious habitats.
“This was one of the measures set out in our Plan for Water earlier this year. I am proud to say this government has acted swiftly so that this will now be enshrined in law, further strengthening the power of regulators to hold polluters to account.”
Environment Agency Chair Alan Lovell said: “We regularly prosecute companies and individuals through criminal proceedings, but these new powers will allow us to deliver penalties that are quicker and easier to enforce, even though the most serious cases will continue to go to court.
“That should be an important deterrent – boosting compliance across a range of sectors, driving down pollution and safeguarding the ecology and prosperity of our natural world.”
There are clear provisions in the Sentencing Council guidelines that will ensure the level of penalties levied are proportionate to the degree of environmental harm and culpability. These include safeguards to ensure the operator’s ability to pay, the size of the operator, and the degree of responsibility and harm, amongst others – all of which are taken into account when imposing a penalty.
The amendments to legislation will be approved by both Houses of Parliament in due course before coming into force.
As set out in the UK government’s Plan for Water, future environmental fines and penalties from water companies will be re-invested into the government’s new Water Restoration Fund.
This fund will deliver on-the-ground improvements to water quality, and support local groups and community-led schemes which help to protect our waterways. River catchment groups – bringing together local NGOs, councils, government agencies and farmers and working together in catchments across the country – will benefit from this funding.
Interactive guide expected to help staff spot and tackle economic abuse
95% of women who experience domestic abuse report experiencing economic abuse
Treasury minister calls for experts to provide feedback on the guide
UK businesses and charities are set to benefit from a free interactive guide to help their staff spot and tackle economic abuse when speaking to customers over the phone, Financial Secretary to the Treasury Victoria Atkins has announced today.
The interactive guide, which will be available widely later this year, is being released to 30,000 HMRC staff today to help them spot the signs and create an appropriate environment for victims to disclose their experiences. It builds on the government’s Economic Abuse Toolkit, released earlier this year.
Victoria Atkins met with staff and survivors at Advance charity’s West London Women’s Centre today to mark the announcement and was joined by former Love Island contestant and domestic abuse campaigner Malin Andersson.
The minister ran through an early demo of the tool with attendees at the visit to drum up momentum as she called on experts to work with HMRC to get the online tool right, before they distribute it freely online later this year.
By increasing the awareness of staff in government, business and charities of economic abuse, the government hopes the new interactive tool will play its part in stopping violence against women and girls, to build stronger communities for future generations.
Financial Secretary to the Treasury Victoria Atkins said: “The government passed the landmark Domestic Abuse Act and I am determined to build on that commitment to help victims.
“Economic and financial abuse can be less understood than other forms of domestic abuse, which is why it is vital organisations share best practice with one another whenever they can.
“That is why I’ve asked HMRC to work with charities and experts over the summer to produce a publicly available interactive guide which staff from any organisation which speaks to customers will be able use.”
Economic abuse, which domestic violence charity Refuge estimates 16% of adults in the UK have experienced, is when an individual’s ability to acquire, use and maintain economic resources are taken away by someone else in a coercive or controlling way.
Internal guidance has been distributed to 30,000 HMRC staff today to help front line staff spot victims of economic abuse when speaking to them over the phone. It will help them understand the different types of economic abuse, as well as what signs and characteristics to look out for.
The aim is for this guidance, with support from industry, charities and experts over the summer, to be turned into a free interactive tool to support businesses and organisations whose employees also speak to customers daily.
Malin Andersson said: ““We need everyone to work together if we’re going to be able to stamp out domestic abuse once and for all, so it’s fantastic to see an initiative which will make a difference by training so many people, from businesses and charities, to recognise economic abuse.”
Minister Atkins will also introduce the early demo of the interactive guidance to representatives from the financial services sector and charities at a roundtable later today, where she will hear more about what the sector is doing to tackle economic abuse and what more can be done.
By working with stakeholders to develop and tailor it, the government wants the interactive guidance to reflect the real-world experiences of victims.
Niki Scordi, Advance’s CEO said: ““Understanding the behaviours of domestic abusers and their continuous attempts to intimidate and control survivors, mainly women and children, long after they leave the abusive home is vital.
“This includes control through economic and financial means, such as child support, school fees, bank accounts, loans and access to employment.
“Supporting survivors with specialist Domestic Abuse Advocates in the community and charities like Advance is essential to help change, and sometimes save, the lives of those devasted by domestic and economic abuse.”
The internal guidance distributed by HMRC to its staff today comes hot off the heels of the Economic Abuse Toolkit released in January 2023, which aims to help public sector organisations train staff to identify economic abuse.
Specialist charity Surviving Economic Abuse (SEA), which was one of the organisations which contributed to the Toolkit, has seen a 150% increase in its website user numbers over the past two years (April 2021 5200 users. April 2023 13,000 users).
SEA research also found seven in ten front-line professionals reported the number of victims of economic abuse coming to their organisation for help had increased since the start of the pandemic. By the end of the first lockdown, SEA found one in five women were planning to seek help around welfare benefits.
Tackling domestic abuse is a government priority and improving the response to economic abuse is integral to this. For the first time in history, economic abuse is now recognised in law as part of the statutory definition of domestic abuse included in the Domestic Abuse Act 2021. This is in recognition of the devastating impact it can have on victims’ lives.
Dr Nicola Sharp-Jeffs OBE, CEO and founder of Surviving Economic Abuse said: “Economic abuse is an insidious and often invisible form of control, one which can trap a victim-survivor in a relationship with an abuser and leave them feeling like there is no escape.
“This form of abuse can create dependency on an abuser by restricting their access to economic resources, or instability if the survivor is forced to cover all household costs. It causes long lasting harm including debt and bad credit, so that even when someone manages to leave, these effects can follow them around for the rest of their lives, often preventing them from moving on safely.
“We know that victim-survivors are more likely to disclose economic abuse to their bank than they are to the police.
“It is crucial that frontline employees – whether they work in the public or private sector – are trained to understand economic abuse and how abusers might use their service to continue to control a victim.
“It is vital they are given the knowledge and the tools to spot the signs of economic abuse, develop specialist responses and feel confident signposting a survivor to broader support. The right response can be life changing.
“We’re delighted to see the Treasury take this important step to ensure victim-survivors of economic abuse get a good response whoever they speak to. We look forward to working together to ensure this new interactive guide helps organisations effectively respond to economic abuse.”
Chancellor outlines reforms to boost pensions and increase investment in British businesses
the ‘Mansion House Reforms’ could unlock an additional £75 billion for high growth businesses, while reforms to defined contribution pension schemes will increase a typical earner’s pension pot by 12% over the course of a career
comprehensive reforms will increase pension pots by as much as £16,000
The reforms will also unlock up to £75 billion of additional investment from defined contribution and local government pensions, supporting the Prime Minister’s priority of growing the economy, and delivering tangible benefits to pensions savers.
The United Kingdom has the largest pension market in Europe, worth over £2.5 trillion. Over the past ten years Automatic Enrolment has helped an extra ten million people save for their futures, with £115 billion saved in 2021, but how this money is invested is limiting returns for savers. Comparable Australian schemes invest ten times more in private markets than UK schemes, reaping the rewards that UK savers are missing out on.
To level the playing field, the Chancellor and the Lord Mayor have supported an agreement between nine of the UK’s largest Defined Contribution pension providers, committing them to the objective of allocating 5% of assets in their default funds to unlisted equities by 2030. These providers represent over £400 billion in assets and the majority of the UK’s Defined Contribution workplace pensions market.
This could unlock up to £50 billion of investment in high growth companies by 2030 if all UK Defined Contribution pension schemes follow suit.
More effective investments by defined contribution pension schemes will also increase savers’ pension pots by up to 12%, or as much as £16,000 for an average earner.
Chancellor of the Exchequer Jeremy Hunt said:“British pensioners should benefit from British business success. By unlocking investment, we will boost retirement income by over £1,000 a year for typical earner over the course of their career.
“This also means more investment in our most promising companies, driving growth in the UK.”
Secretary of State for Work and Pensions Mel Stride said:“British workers should have the confidence that their pension savings are working as hard as they are.
“Our reforms will benefit savers and society – unlocking investment into pioneering UK businesses, growing the economy, and helping the record number of people in this country saving into a pension to achieve the retirement they want.”
The Chancellor’s Mansion House Reforms will also deliver better returns for savers through a new Value for Money Framework which will make clear that investment decisions made by pension firms should be based on overall long-term returns and not simply costs. Pension schemes which are not achieving the best possible outcome for their members will be wound up into larger, better performing schemes.
Analysis shows that over a five-year period there can be as much as 46% difference between the best and worst performing pension schemes. This means that a saver with a pot of £10,000 could have notionally lost £5,000 over a 5-year period from being in a lowest performing scheme.
The Mansion House Reforms will be guided by the Chancellor’s three golden rules: to secure the best possible outcome for pension savers; to always prioritise a strong and diversified gilt market as we seek to deliver an evolutionary, rather than revolutionary, change in our pensions market; and to strengthen the UK’s position as a leading financial centre to create wealth and fund public services.
To ensure that the money unlocked by these reforms is invested quickly and effectively, the Chancellor has asked the British Business Bank to explore the case for government to play a greater role in establishing investment vehicles, drawing upon the BBB’s skills and expertise.
This will complement the £250 million of support that government has made available through the Long-term Investment for Technology and Science (LIFTS) initiative to incentivise new industry-led investment vehicles.
The government will also encourage the establishment of new Collective Defined Contribution funds which can invest more effectively by pooling assets as well as launch a call for evidence to explore how we can support pension trustees to improve their skills, overcome cultural barriers and realise the best outcomes for their pension schemes and subsequently their members.
Defined Benefit pensions
For the Local Government Pension Schemes a consultation will be launched on setting an ambition to double existing investments in private equity to 10%, which could unlock £25 billion by 2030. The consultation proposes a deadline of March 2025 for all Local Government Pension Scheme funds to transfer their assets into LGPS pools and setting a direction that each pool should exceed £50 billion of assets.
To improve outcomes for savers in a highly fragmented market, with over 5,000 Defined Benefit Schemes, the government will set out its plans on introducing a permanent superfund regulatory regime to provide sponsoring employers and trustees with a new way of managing Defined Benefit liabilities.
A new call for evidence will also launch tomorrow on the possible role of the Pension Protection Fund and the part Defined Benefit schemes could play in productive investment whilst securing members’ interests and protecting the sound functioning and effectiveness of the gilt market.
Capital Markets
The UK has the largest stock market in Europe and one of the deepest in the world – the London Stock Exchange had the most Initial Public Offerings (IPOs) outside of the US in 2021.
A comprehensive set of reforms will help attract the fastest growing companies in the world to grow and list in the UK. Prospectuses will be simplified, another milestone of Lord Hill’s UK Listing Review, replacing the EU’s outdated regime.
Firm’s prospectuses for investors will be easier to produce, more accessible and understandable, saving companies time and money and attracting more firms to do business in the UK.
Protectionist rules inherited from our time in the EU will be abolished. The Share Trading Obligation and Double Volume Cap have held back UK businesses and will be removed so firms can access the best and most liquid markets anywhere in the world.
The government has also accepted all of Rachel Kent’s Research Review published today, paving the way for a new ‘Research Platform’ that will provide a one-stop-shop for firms looking for research experts. It also sets the path for potentially removing the unbundling rules – an inherited EU law that requires brokers to charge a separate fee for research.
The Chancellor will set out plans to establish an entirely new kind of stock market that allows private companies to access capital markets without floating on a stock exchange. This ‘Intermittent Trading Venue’ would be a world first and will help firms grow and boost the UK economy. It will be complemented by a move to make shares fully digital rather than written on paper, saving businesses time and money.
This builds on the Chancellor’s Edinburgh Reforms and Solvency II reforms which will unlock over £100 billion of productive investment from insurance firms across the UK over a decade.
Seizing the opportunities of the future
To ensure the continued success of the UK’s world-leading financial services sector, firms must be ready to innovate faster, with regulators willing to support them as they do.
Following the Financial Services and Markets Act 2023 passing into law, the government has announced that it is commencing repeal of almost 100 pieces of unnecessary retained EU law for financial services, further simplifying the UK’s regulatory rulebook.
The government launched an independent review into the future of payments – led by Joe Garner, former Chief Executive Officer of Nationwide Building Society – to help deliver the next generation of world class retail payments, including looking at mobile payments.
The government also welcomes a report suggesting ways to move to fully digital shares, scrapping outdated paper-based shares. This will make markets more efficient and modernize how people own shares.
Further information
The Mansion House Compact members are: Aviva; Scottish Widows; L&G; Aegon; Phoenix; Nest; Smart Pension; M&G; Mercer.
The package of reforms announced yesterday could help increase pension pots for an average earner who starts saving at 18 by 12% over their career – over £1,000 more a year in retirement – all whilst supporting UK economy, businesses, and employment.
Analysis shows a difference in returns between schemes over a 5-year period of up to 46% in some cases. This means that a saver with a pot of £10,000 could have notionally lost £5,000 over a 5-year period from being in a lowest performing scheme.
Reaction to the Chancellor’s Mansion House Reforms
Jamie Dimon, Chairman & CEO, JPMorgan Chase said:“Great financial centers stay competitive by responding to the market and evolving through the kinds of important iterations that the Chancellor has announced.
“It’s also good to see the U.K. preparing for the industries of tomorrow considering the great promise of life sciences and A.I. as cornerstones of the economy in the years to come.”
Sir Jon Symonds CBE, Chair, GSK said:“I welcome these important reforms which will further strengthen the UK capital markets and support economic growth.
“The changes will help increase investment returns for pension savers through improved access to all asset classes including in high growth sectors, and ensure the UK’s most innovative companies are better supported by UK capital to stay in this country as they scale to maturity.”
Brent Hoberman, Executive Chairman & Co-Founder, Founders Forum, Founders Factory said:“The planned pension reforms will enable for capital to be productively invested in funds and scaleup companies in the UK.
“This should be welcome news to the UK industries of the future, their ability to attract more capital will create more national champions and generate growth, jobs and increased tax revenue.
“The reforms will enable the UK to build on the positive momentum in these key parts of the economy drive further synergies between it’s world class financial institutions and entrepreneurial base.”
C. S. Venkatakrishnan, Group Chief Executive, Barclays said:“The UK has needed a bold, forward-looking policy agenda and industrial strategy to grow the economy.
“These Mansion House Reforms are an important step in the right direction in mobilising private capital to support growth and innovation.”
Irene Graham OBE, CEO, ScaleUp Institute said:“The package of measures announced by the Chancellor today are very much welcomed by the ScaleUp Institute.
“They contain significant and innovative solutions which will help to enable easier and simpler access to capital markets and patient growth capital. These new initiatives, coupled with the reforms already underway, will support and fuel the global ambitions of our scaleups, and high-potential scaling businesses, across all sectors and all areas of the UK.”
Miles Celic, Chief Executive Officer, TheCityUK, said: ““The competitiveness and attractiveness of any successful international financial centre must, by definition, always be a work in progress. The Chancellor is right to be ambitious in building on the UK’s successes and recognising that we can’t afford to be complacent.
“The Mansion House Reforms are ambitious, pragmatic and necessary. They will underpin the UK industry’s future success. Most importantly, their main beneficiaries will be the British people, who will gain from greater investments in growing businesses, revitalising communities and improving retirements.”
Chris Hulatt, Co-Founder, Octopus Group said: ““We welcome government’s efforts to make the UK a more attractive place to start a business, and support measures that provide additional opportunities for private companies to raise capital.
“Finding new ways for the most skilled and talented entrepreneurs to access capital as they build businesses is fundamental to helping the UK maintain its place as the best place to start, build and scale a business.”
Noel Quinn, Group Chief Executive, HSBC said:“I welcome the strong and comprehensive package of measures announced by the Chancellor in his Mansion House speech.
“Unlocking equity to support companies in innovative high-growth sectors such as technology and life sciences is vital to the future growth of the UK economy.”
Lord Mayor, Nicholas Lyons said: ““These reforms and the Mansion House Compact mark a historic turning point that will accomplish the dual aim of securing a brighter future for retirees and channelling billions into our economy.
“I’m proud to have convened key industry players to make this commitment to unlock £50bn in capital by the end of the decade which will improve returns for pension savers and support firms to grow, stay and list in the UK.”
Tim Orton, Chief Investment Officer, Aegon UK said: ““Aegon UK is proud to be a founder signatory of the Mansion House Compact which will help deliver better long-term outcomes for our customers.
“We are committed to ensuring our customers can access and share in the growth and success of innovative companies we invest in. We will use our scale and expertise to develop investment solutions seeking to improve the retirement outcomes of the millions of members of the defined contribution pension schemes we support. The Compact will also create opportunities that help deliver our climate targets as we progress towards net zero.”
Sir Nigel Wilson, Group CEO, Legal & General said:“As the UK’s largest manager of money for pension clients, L&G is pleased to support the ambition set by the Compact.
“Increasing investment in science, technology and infrastructure will support better returns for the tens of millions saving for their retirement, as well as stimulate much needed long-term growth for the UK economy.”
Mark Fawcett, CEO, Nest Invest said:““For many years now, illiquid assets have been integral to diversified DC pension schemes around the world.
” It’s been a key driver behind Nest setting up our own private market mandates to ensure our members aren’t missing out. Nest will continue to increase our investment in unlisted equities, helping our 12 million members benefit from the strong returns these types of deals can typically offer.”
Ruston Smith, Chair, Smart said: ““Smart Pension is committed to securing better outcomes for long-term savers. Giving UK savers access to higher net returns by investing in unlisted equities, including innovative, high-growth UK companies as part of a well diversified portfolio, will deliver these outcomes over time.
“We are pleased to be a signatory of the Mansion House Compact and, as a successful British fintech, we are proud to be supporting the country’s technology sector, helping home-grown start-ups and scale-ups to flourish and thrive.”
Scottish Widows, CEO, Chirantan Barua said: ““The industry needs to modernise the investment options available to customers.
“With the right consumer protections in place, the proposals announced today could make a huge difference to our customers and the wider UK economy. I’m proud that Scottish Widows is a founding signatory of the Mansion House Compact.”
Phil Parkinson, Investments and Retirement Leader, Mercer said:“Mercer supports proposals that lead to improved pension scheme member outcomes.
“As a global investment solutions provider, we see first-hand the value that illiquid asset allocations can bring to investors’ portfolios from a risk and a return perspective and are in favour of initiatives designed to unlock this asset class for DC members.”
Edward Braham, Chair, M&G said:“Patient capital put to work in companies or projects over multiple decades is essential to support economic growth and importantly, capture value for people’s pensions as they save for their retirement.
“M&G’s heritage is in investing in private markets, whether it is through infrastructure, real estate or innovative companies with purpose. We are democratising access to private markets through the Prudential With Profits Fund, and are supportive of DC pension reforms that encourage more investment of this kind that has potential to result in positive outcomes for savers.”
Mike Eakins, Chief Investment Officer, Phoenix Group said:““We are proud to sign the Compact, which is an important step to allow UK long-term savers to invest in a more diversified portfolio, giving them access to the potential returns of a broader range of assets, in line with their international counterparts.
“Currently, only 9% of UK pension funds are invested in alternative assets as compared to 23% in other major pensions markets. With the right regulatory environment, Phoenix Group could invest up to £40 billion in sustainable and/or productive assets to support economic growth, levelling up and the climate change agenda whilst also keeping policyholder protection at its core.”
Decriminalisation of all drugs for personal supply is one of a number of polices which the Scottish Government is calling on the UK Government to implement in a new paper on drug law reform.
The move would allow people found in possession of drugs to be treated and supported rather than criminalised and excluded. Decriminalisation would also mean that without a criminal record, people in recovery would have a better chance of employment.
The document has been published by the Scottish Government outlining measures which could be implemented through further devolution, independence, or changes enacted immediately by the UK Government to support the work being done within existing powers to reduce drug deaths.
Among the proposals are:
Decriminalisation of all drugs for personal supply progressed as part of a wider review of drug laws
Immediate legislative changes to allow us to fully and properly implement harm reduction measures such as supervised drug consumption facilities (rather than the current proposal being explored which is constrained by having to work within existing legislation), drug checking and increased access to the life saving drug naloxone.
a roadmap for further exploration of drug law reform, focused on evidence and the reduction of harm, including an update of the drug classification system to be based on harms caused
The proposals follow recommendations made by the Drug Deaths Taskforce in September 2021.
Minister for Drugs Policy Elena Whitham said: “These are ambitious and radical proposals, grounded in evidence, that will help save lives.
“We want to create a society where problematic drug use is treated as a health, not a criminal matter, reducing stigma and discrimination and enabling the person to recover and contribute positively to society. While we know these proposals will spark debate, they are in line with our public health approach and would further our national mission to improve and save lives.
“We are working hard within the powers we have to reduce drug deaths, and while there is more we need to do, our approach is simply at odds with the Westminster legislation we must operate within.
“These policies could be implemented by the Scottish Government through the devolution of further, specific powers to Holyrood including the Misuse of Drugs Act 1971 – or through independence. An immediate way for these policies to be enacted would be for the UK Government to use its existing powers to change its drug laws.
“Scotland needs a caring, compassionate and human rights informed drugs policy, with public health and the reduction of harm as its underlying principles, and we are ready to work with the UK Government to put into practice this progressive policy.”
A spokesperson for the Scottish Conservatives said: “Trying to solve Scotland’s drug death crisis by decriminalising dangerous class-A drugs is reckless.
“To tackle the highest drug death rate in Europe, Humza Yousaf needs to back our Right to Recovery Bill.”
The Scottish Liberal Democrats have been calling for the decriminalisation of drug misuse for years. From rehab spaces to support for families, there are pressing areas where action is needed. This is an urgent public health crisis and ministers need to act like it.
Retailers will be forced to provide up-to-date price information as part of new government scheme to call out rogue supermarkets and stations overcharging drivers at the pump.
Motorists will be able to easily compare fuel prices in real time to choose the best prices whilst boosting competition and in turn driving down prices.
Government action after watchdog finds some supermarkets charged drivers 6p more per litre for fuel from 2019 to 2022 – meaning £900m in extra costs across the UK in 2022 alone.
Motorists are being put in the driving seat to find the best fuel prices as the government prepares to force retailers to publicly fess up to how much they are charging at the pump.
In a win for consumers, they will be able to compare prices in real time in any area of the UK, through a new fuel price reporting scheme. Drivers will be able to easily identify those charging fair prices and those failing to pass on savings from falling wholesale costs.
The government will change the law to force retailers to comply by providing up to date price information, which is expected to lead to greater transparency and competition – in turn driving down prices and easing people’s cost of living.
The new scheme will make pricing data available for third parties – paving the way for them to create price comparison apps and websites – supporting the digital economy and helping growth.
The tough action by government follows publication of a Competitions and Markets Authority (CMA) report today showing some supermarkets charged drivers 6p more per litre for fuel. This amounts to £900m in extra costs in 2022 alone – around £75m a month.
New powers will be handed to a public organisation yet to be decided, to closely monitor the UK road fuel market, scrutinise prices and alert government if further intervention is needed.
This is the latest step in the government’s action to ease the cost of living, as part of its efforts to halve inflation this year – one of the Prime Minister’s five priorities. It follows the Chancellor’s roundtable with regulators last week, including the CMA, to ensure consumers are being treated fairly and help those struggling to make payments.
Grant Shapps, Energy Security Secretary, said: “Some fuel retailers have been using motorists as cash cows – they jacked up their prices when fuel costs rocketed but failed to pass on savings now costs have fallen.
“It cannot be right that at a time when families are struggling with rising living costs, retailers are prioritising their bottom line, putting upwards pressure on inflation and pocketing hundreds of millions of pounds at the expense of hardworking people.
“Today I’m putting into action the CMA’s recommendations and standing by consumers – we’ll shine a light on rip-off retailers to drive down prices and make sure they’re held to account by putting into law new powers to increase transparency.”
Jeremy Hunt, Chancellor of the Exchequer, said: “It isn’t fair that businesses are refusing to pass on lower prices to protect their profits while working people struggle with balancing their budgets.
“Consumers need to be treated fairly, and so we’re empowering drivers to find the best prices possible for their fuel by taking swift steps following the CMA’s recommendations.”
The CMA’s report found a concerning weakening of competition in the fuel market and an overall increase in retailers’ margins, especially in respect of diesel and with supermarkets the worst offenders (see below).
It also noted a lack of reliable and comprehensive price information available to motorists.
The report recommends the mandatory public disclosure of fuel prices and establishment of a body to monitor the market, which the government has agreed to.
The government will consult on the design of the open data scheme, and market monitoring function this autumn – with changes to the law needed to bring it in. In the interim, the CMA will create a voluntary scheme encouraging fuel retailers to share accurate, up-to-date road fuel prices for publication by August and continue to monitor fuel prices using its existing powers.
The move follows a similar scheme in Germany, which boosted competition amongst fuel retailers. Meanwhile, motorists who shopped around in Queensland, Australia, saved on average $93 per year off the back of a statewide scheme rolled out in the area.
Action to protect consumers announced today follows the government spending nearly £40 billion protecting households and businesses from spiralling energy bills over the colder months – including paying half the typical household bill and saving the average home roughly £1,500 by the end of June.
Meanwhile, with the latest Ofgem price cap coming into effect from 1 July, families will see their yearly energy bills fall by around £430 on average. On top of this, the government is also providing additional support to the most vulnerable, with an extra £150 for disabled people and £900 for those on means-tested benefits.
CMA sets out plan to help drivers get more competitive fuel prices
A new fuel finder scheme to enable drivers access to live, station-by-station fuel prices on their phones or satnavs would help revitalise competition in the retail road fuel market, the CMA said yesterday
Increased supermarket fuel margins led to drivers paying an extra 6 pence per litre
Instant access to prices via fuel finder scheme should drive down prices and help people find cheapest fuel
New monitoring body needed to hold industry to account
Asda fined £60,000 for failure to provide information when required
The scheme would be made possible by new compulsory open data requirements and backed by a new ‘fuel monitor’ oversight body. The proposals are the key recommendations by the Competition and Markets Authority (CMA) to UK government following its in-depth study into the road fuel market which found a weakening of competition in retail since 2019.
At present, retailers only provide information on prices at the petrol stations themselves. This makes it hard for drivers to compare prices and weakens competition. The fuel finder open data scheme would need statutory backing through legislation to ensure fuel retailers provide up-to-date pricing and make that available to drivers in an open and accessible format that can be easily used by third party apps such as satnavs or map apps, through a dedicated fuel finder app, or a combination of both.
The fuel monitor would monitor prices and margins on an ongoing basis and recommend further action if competition continues to weaken in the market. As the UK transitions to net-zero the demand for petrol and diesel will reduce. The fuel monitor will help us understand the impact of this on vulnerable consumers that remain dependent on petrol and diesel for longer, as well as those living in areas with limited choice of fuel stations.
The fuel monitor will ensure ongoing scrutiny of retail prices for petrol and diesel. We observed that following the interim update issued by the CMA in May 2023, the average price of road fuel fell in large parts of the UK. Over the last year, the CMA has investigated the road fuel market in detail and reached the conclusion that competition is not working well and greater transparency in pricing is needed to improve consumer confidence and bring down prices for drivers.
There is no evidence to suggest that there has been cartel behaviour taking place and the CMA has no plans to open an enforcement case.
The report found that:
From 2019-22, average annual supermarket margins have increased by 6 pence per litre (PPL)
Increased margins on diesel across all retailers have cost drivers an extra 13 PPL from January 2023 to the end of May 2023
With greater transparency and shopping around as effectively as possible, the driver of a typical family car could save up to £4.50 a tank within a 5-minute drive
Motorway service stations are charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations
Supermarkets are generally the cheapest places to buy fuel, with Asda typically the cheapest of those. This has anchored prices in the past. The CMA found that in 2022, Asda and Morrisons each made the decision to target higher margins.
Asda’s fuel margin target in 2023 was more than three times what it had been for 2019, while Morrisons doubled their margin target in the same period. Other retailers, including Sainsbury’s and Tesco, did not respond in the way you would expect in a competitive market and instead raised their prices in line with these changes. Taken together this indicates that competition has weakened and reinforces the need for action.
Diesel prices have been slow to drop in 2023, partially down to Asda ‘feathering’ (reducing pump prices more slowly as wholesale prices fell) its prices and other firms not responding competitively to that. As a result, the CMA estimates that drivers have paid 13 PPL more for diesel from January 2023 to the end of May 2023 than if margins had been at their historic average.
Sarah Cardell, Chief Executive of the CMA, said: “Competition at the pump is not working as well as it should be and something needs to change swiftly to address this.
“Drivers buying fuel at supermarkets in 2022 have paid around 6 pence per litre more than they would have done otherwise, due to the four major supermarkets increasing their margins. This will have had a greater impact on vulnerable people, particularly those in areas with less choice of fuel stations.
“We need to reignite competition among fuel retailers and that means two things. It needs to be easier for drivers to compare up to date prices so retailers have to compete harder for their business.
“This is why we are recommending the UK government legislate for a new fuel finder scheme which would make it compulsory for retailers to make their prices available in real time. This would end the need to drive round and look at the prices displayed on the forecourt and would ideally enable live price data on satnavs and map apps.
“Given the importance of this market to millions of people across the UK this needs to be backed by a new fuel monitor function that will hold the industry to account. As we transition to net zero, the case for ongoing monitoring of this critical market will grow even stronger, so we stand ready to work with the UK government to implement these proposals as quickly as possible.”
Local factors also contribute to how much drivers pay at the pump. The CMA identified that there are significant price differences in local areas, and that the difference between the highest and lowest prices in local areas has increased as average fuel prices have risen.
Lower prices are typically associated with having a supermarket retailer nearby, and where there are no supermarkets, for example, in remote areas, fuel retailers are likely to have higher costs and prices are likely to be higher. The fuel finder scheme will be important to help people find the best deal possible but it is essential that the monitoring function keeps a close eye on local variations in prices.
The price premium at motorway service stations has grown in real terms since 2012, and price variation on motorways is low, due to limited competition between service stations. A fuel finder scheme would allow drivers an easy way to see where they can find cheaper fuel in the area if they come off the motorway.
The CMA has also imposed fines totalling £60,000 on Asda for failing to provide relevant information in a timely manner.
Asda received two fines, each of £30,000 (the statutory maximum), for:
Sending a representative to attend a compulsory CMA interview who was not equipped to provide evidence on certain topics the CMA had identified in advance.
Failing to respond completely to a compulsory written request for information.
Asda has now provided the CMA with the required information.
The CMA also found that “increased margins on diesel across all retailers have cost drivers an extra 13 PPL from January 2023 to the end of May 2023.”
The organisation goes on to say:
“Over the last year, the CMA has investigated the road fuel market in detail and reached the conclusion that competition is not working well and greater transparency in pricing is needed to improve consumer confidence and bring down prices for drivers.”
However, the CMA could find “no evidence to suggest that there has been cartel behaviour taking place and the CMA has no plans to open an enforcement case.”
The CMA’s study on road fuel prices identified a reduction in competition amongst the supermarkets:
“Supermarkets are generally the cheapest places to buy fuel, with Asda typically the cheapest of those. This has anchored prices in the past. The CMA found that in 2022, Asda and Morrisons each made the decision to target higher margins. Asda’s fuel margin target in 2023 was more than three times what it had been for 2019, while Morrisons doubled their margin target in the same period.
“Other retailers, including Sainsbury’s and Tesco, did not respond in the way you would expect in a competitive market and instead raised their prices in line with these changes. Taken together this indicates that competition has weakened and reinforces the need for action.
“Diesel prices have been slow to drop in 2023, partially down to Asda ‘feathering’ (reducing pump prices more slowly as wholesale prices fell) its prices and other firms not responding competitively to that. As a result, the CMA estimates that drivers have paid 13 PPL more for diesel from January 2023 to the end of May 2023 than if margins had been at their historic average.”
The CMA is calling for the compulsory release of price data by fuel retailers so that apps can be developed which allow drivers to check what is the best price in their local area.
It also wants to see a new monitoring body to hold the industry to account.
According to the CMA “motorway service stations are charging around 20 PPL more for petrol and 15 PPL more for diesel compared to other fuel stations.”
LOCAL ARTS ORGANISATION REACHES 80% OF FUNDING TARGET
North Edinburgh Arts has been awarded £250,000 from the UK Government’s Community Ownership Fund to support the Millan Hub project.
The announcement marks a significant step forward in NEA’s capital development journey, bringing the organisation closer to achieving their fundraising target: they have now reached 80% of their total goal.
Communites across the UK will benefit from over £50 million in funding to support community ownership of local assets.
North Edinburgh Arts was one of eight successful applicants in Scotland at this stage of the process. Another Edinburgh applicant was Portobello’s campaign to renovate their Town Hall. They receive £90,000.
This £250,000 awarded to NEA will be added to funds already secured for the ambitious build from Foundation Scotland, The Garfield Weston Trust, The William Syson Trust, The Robertson Trust, The Binks Foundation, and the Scottish Government Regeneration Capital Grant Fund.
Reaching four fifths of the target gives a real boost to NEA’s Board, team, participants, visitors, and volunteers alike.
A NEA spokesperson said: “We are grateful for the overwhelming support we have received from our local residents, with over 96% backing our mission to keep NEA at the heart of a creative, connected, inspired, and inspiring community.
“Your unwavering belief in our vision has been the driving force behind this achievement. Thank you for your ongoing support!”
NEA is a well-loved and well-used venue but we had outgrown our building. To meet the needs of current and future generatons of North Edinburgh residents it needed to be redeveloped.
As part of the new MacMillan Hub the NEA capital programme will:
Increase the footprint of NEA by 380m2, adding two foors of studio and work/ space Extend the café to look/ into MacMillan Square, and ofer enhanced community facilites Provide bespok/e work/shop space for the ommunity Shed Reduce the carbon footprint through beter insulaton, lightng and environmental design and constructon Be a fully owned community asset.
With the build scheduled for completion early in 2024 NEA has set up a welcome cabin in front of the site to ensure local residents can find out more about the build, join up as NEA members (htps://northedinburgharts.co.uk//membership/) and share their aspiratons for the space.
The refurbished, redesigned and expanded venue will be a welcome space for all, ofering local residents high quality culture, arts, enterprise and meetng spaces. In additon, our venue will link, on site, to the city council’s new Library, new Learning and Skills Hub, new Early Years Centre and social housing.
Lesley Hinds, Chair of North Edinburgh Arts said: ‘North Edinburgh Arts is delighted to receive funding from Community Ownership Fund.
This funding from the Westminster Government shows the confidence they have in NEA and its future in the expanded facilities at MacMillan Hub.’
Prepayment meter households will no longer pay more on average for their energy than direct debit customers, as the UK Government scraps unfair charge
Unfair charge on prepayment meter customers scrapped
change will help around three million households and save on average £21 a year
together with the new energy price cap taking effect today, households will save hundreds of pounds on their bills
Fairness will be delivered for households today as the government scraps the unfair charge on prepayment meter customers.
The change, taking effect from today, will help around three million households using prepayment meters across Great Britain – bringing their bills in line with those who pay by direct debit, with the government stepping in to cover the difference.
Currently, households on the pay-as-you-go meters pay more on average than direct debit customers, as it costs suppliers more to service their homes – such as collecting payments or giving out vouchers – with the charges passed onto consumers.
Removing the prepayment meter premium means these households will save around £21 a year on their bills, making sure the system is fair and providing extra support to consumers who are typically on low incomes.
Scrapping the prepayment meter premium comes as Ofgem’s latest price cap takes effect today – which thanks to improvements in the wholesale market, will bring the typical annual energy bill down from £2,500 under the Energy Price Guarantee to around £2,074. This will help lower inflation – one of the Prime Minister’s five promises – as high energy prices drive up prices across the economy.
The fall in energy bills will save the average household around £426, or 17%, and means for every £100 previously spent on energy bills, consumers will now pay £83.
Energy Consumers and Affordability Minister Amanda Solloway said: “No one should be charged more for having a prepayment meter – today, we’re putting an end to this historic injustice.
“With households on prepayment meters typically on some of the lowest incomes, this is a vital change.
“Alongside the hundreds of pounds coming off energy bills from today, thanks to the fall in the price cap – this will offer extra help to ensure families stop being unfairly penalised.”
To ensure the prepayment premium comes to an end as quickly as possible, the Government will be funding the change up to April 2024. Ofgem as the energy regulator will be devising a plan that will eradicate it permanently after that date.
Earlier this year the government took steps to crack down on the abuse of prepayment meters by energy suppliers. The Energy Security Secretary Grant Shapps demanded action from Ofgem and suppliers to put an end to wrongful prepayment meter installations in vulnerable households.
The government is clear moving customers to prepayment meters must always be the very last resort and has asked for regular updates from Ofgem and consumer groups to make sure all suppliers adhere to the regulator’s new Code of Practice – which puts measures in place to protect against them being installed in homes where they shouldn’t be.
Recent figures showed nearly £40 billion was spent by government between October 2022 and March 2023 to help keep household and business energy bills down, the most ever provided to subsidise household bills in UK history.
Over winter, the government covered nearly half a typical household’s energy bill and saved the average home roughly £1,500 by the end of June. That included providing £650 million to households on traditional prepayment meters through the Energy Bills Support Scheme.
The scheme saw vouchers totalling £400 issued over six months from October with latest figures showing 85% had been redeemed by the end of May.
While the deadline for applications has passed, that number is expected to rise with the last applications and reflected in figures due over the Summer.
