1 November 2022
Letter from Westminster – November 2022

As the days grow shorter and colder, we approach winter and can expect morning frosts and later sunrises. We are all concerned by the higher cost of our energy bills, as the global crisis caused by President Putin’s unprovoked invasion of Ukraine impacts us here in Shropshire.

While Putin may be on the backfoot, it may also be a long time before the global energy market stabilises again. Our resolve in supporting Ukraine must hold. But we also have to manage higher costs for now.

The new Prime Minister Liz Truss has acted swiftly and decisively to help households and businesses through this challenging period.

This builds on the introduction announced in March of a £400 reduction in electricity bills for all, a non-repayable £150 cash rebate for homes in Council Tax bands A-D, equivalent to 80% of households, and £144 million of discretionary funding for local authorities.

I have been urging Ministers to make support available for those off the gas grid reliant on alternative energy sources, including domestic heating oil, many of whom live in remote rural areas, as well as those whose fuel bills are paid by others, such as those in park homes in rural Shropshire.

The Chancellor made explicit in his September fiscal statement that households reliant on alternative energy sources would benefit from the £400 of universal support available and announced a further £100 for those using alternative energy sources, to be paid through discounts on electricity bills from 1st October. At the time of writing, Ministers are developing appropriate provisions for landlords to pass on discounts to tenants paying all-inclusive bills.

But the Government knows we need to go further. The Prime Minister introduced an Energy Price Guarantee (EPG) from 1st October to give households certainty with their bills. The EPG will cap the unit cost for gas and electricity charged by suppliers.

This guarantee will mean typical three-bedroom households will pay no more than £2,500 per year. This will save the average household £1,000 a year compared with forecast increases in energy costs this coming winter.

Energy cost rates for businesses have been capped for six months.

In the medium term, it is vital that we create a sustainable domestic energy supply through the expansion of renewables (which successive Conservative Governments have increased from 6.5% of electricity generation in 2010 to nearly 43% in 2020) and new nuclear. The Government remains committed to the 2050 net zero target, but this assumes we will continue to rely on fossil fuels for 15% of our electricity generation in 2050, so we need to maintain some domestic production to ensure sustainable supply.

Finally, we must work to improve the energy efficiency of our buildings which generate 30% of UK emissions. Over 40% of homes now meet EPC Standards A-C, an increase from around 10% in 2010.

Several energy efficiency schemes have had funding boosts: the three-year Boiler Upgrade Scheme offering grants of up to £5,000 for low-carbon heating systems; the Home Upgrade Grant Scheme which funds energy efficiency measures for low-income households operated under the ECO programme which received a £800 million boost last month; and the Social Housing Decarbonisation Fund which is helping to upgrade social housing stock to EPC rating C which received £950 million more last month as well.

Over £6 billion has been committed to retrofit schemes over this Parliament and VAT has been cut on materials such as solar panels, heating pumps and roof insulation for five years. Much has been done, though there is also much to do.