08 Sep 2022

CIH responds to Prime Minister’s energy announcement

On 8 September the Prime Minister announced that the government will limit energy bill rises for all households for two years, with a typical annual household energy bill capped at £2,500.

In response to the support package announced CEO Gavin Smart said

"Following our letter to the Prime Minister on Tuesday which called for meaningful action on the cost of living crisis, it’s good to see the government announcing significant support from next month to help bring down energy bills (and address current support gaps) and tackle rising inflation. We do however remain concerned for residents and tenants who will struggle to manage under the £2,500 cap; the End Fuel Poverty Coalition, of which CIH is a member, estimates that 16.4 million people in the UK will still be left in fuel poverty. More direct emergency financial support will also be needed for these low-income households. In our letter to the PM, we suggested several changes to the welfare framework that would help target support for the poorest households.

We support the commitment to accelerate the development of clean technology and to de-couple electricity and gas prices, helping to drive the move to renewable energy. As well as the measures announced today, we very much hope to see further commitments from government to support home energy efficiency measures - reducing demand would help to reduce both household bills and our dependency on gas. Given the temporary suspension of green levies, it will be important to ensure that funding for schemes such as the Energy Company Obligation (ECO) is not reduced. We cannot afford to restrict the delivery of energy efficiency measures at a time when they are more critical than ever."

Further information on the announcement:

  • New price cap will limit average household energy bills to £2,500 a year from 1st October and will last for two years
  • The measures announced will cover people who do not use the main gas grid, including those on heat networks or in park homes
  • The previously announced £400 payment for all houses will still go ahead. The £650 payments to those on benefits will continue (many have already received), as will the £150 to those with disabilities and £300 for pensioners
  • The new guarantee will apply to households in Great Britain, with the same level of support made available to households in Northern Ireland
  • Despite this support, the End Fuel Poverty Coalition estimates that 16.4 million people in 6.9 million UK households will still be left in fuel poverty in winter 2022/23. c.5.3 million of these households will be in England.
  • A new round of the Energy Company Obligation (ECO 4) was announced in June (after a short gap), rising from £640 million to £1 billion annually, focused on low-income householders.