Andy Burnham’s government has been called upon to extend the Warm Home Discount scheme to include an additional 1.5 million households. This request comes amid growing concerns that households in Great Britain could collectively owe energy suppliers a staggering £7 billion by the end of the year.
Domestic energy debt and arrears have escalated by approximately £500 million over the past year, reaching a record £6 billion as of the end of June. This increase is partly attributed to the ongoing fallout from the conflict in Iran. The trade association Energy UK has projected that the amount of energy debt left unpaid for more than 30 days is likely to rise to £7 billion by the close of the year.
Later this week, the energy regulator is expected to announce a 4% increase to the energy price cap, impacting millions of households from October onwards. Dhara Vyas, Chief Executive of Energy UK, commented on this anticipated rise, highlighting that “too many households continue to feel the strain of high energy bills.”
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Last week, Ms Vyas encouraged Andy Burnham’s Labour-led government to implement a “targeted and more permanent” solution to escalating energy bills, rather than relying on “stopgap, ad hoc or emergency measures.”
Currently, the Warm Home Discount provides a one-off payment of £150 during the winter months to individuals receiving means-tested benefits. Energy UK noted that while six million customers benefit from this scheme, there remain an additional 2.5 million households who require assistance due to factors such as medical conditions or poorly insulated homes that increase energy consumption.
Energy UK suggested that by integrating data on customers’ income, health status, and energy usage, a discount programme could deliver targeted and adaptable support. This approach would allow adjustments to be made in response to changing household needs and fluctuating energy prices.
Adam Scorer of the National Energy Action (NEA) underlined the need for change, pointing out that the Warm Home Discount has only increased by £10 over the past decade. He stated, “We desperately need a new approach.”
He added, “There will be a lot of detail to get right, but if the government genuinely wants to provide breathing space for people in fuel poverty, it needs to take this challenge on and work with energy companies and charities to design something truly fit for purpose.”
Ms Vyas further remarked that “the current arrangements fail to provide the help needed and work out more costly.” She concluded by stating, “A social discount will address the fuel poverty gap and provide the right amount of support to the right households at the right time – reflecting that needs vary across different customers.”