Energy UK response to DESNZ: Continuing the Warm Home Discount

Executive Summary 

The Warm Home Discount is one of the Government’s main tools for directly alleviating fuel poverty and reducing energy costs for low-income and vulnerable households. Energy UK welcomes this consultation but highlights that more ambition in targeting and tailoring support to address the scale of debt and affordability pressures. The key elements of the full consultation response are as follows.

More ambition in data sharing and targeting 

Energy UK supports the five-year extension of the Warm Home Discount to ensure policy certainty. However, it is essential that the Government unlocks cross-departmental data sharing to enable the implementation of a better targeted support scheme to materially cut fuel poverty. Using a combination of income, health, and energy consumption data would allow the scheme to reach households most in need and provide more meaningful support. The scheme should move away from flat-rate rebates to offer tiered support that better reflects household needs, and variable payments that adjust as energy prices and market conditions change. We would also like to see the scheme increase to at least £1.5 billion to close the fuel poverty gap, and be progressively funded, with the costs shifting from energy bills to taxation.  

Simplicity 

The scheme should value simplicity and automation wherever possible to maximise value over time for customers. This includes reducing unnecessary administrative burdens to ensure resources are spent as efficiently as possible. 

Aligning the Scottish scheme to England and Wales support this objective. Currently, the lack of data matching in the Scottish scheme increases suppliers’ workload and creates additional fixed costs. The application route means that eligible customers miss out because they are unaware of the scheme, do not realise they qualify, or find the application process too difficult. Moving to an automated, data-matched scheme, as in England and Wales, would address this problem.  

Industry Initiatives 

Energy UK is supportive of continuing the Industry Initiatives into the next scheme year. This part of the scheme allows suppliers to support customers who may not otherwise be reached through debt alleviation or write-off, advice on energy bills, and energy efficiency measures. It is important that the Industry Initiatives allow suppliers the freedom and flexibility to choose how best to support their customers. Fixed caps, such as the debt write off or financial assistance caps, can limit their ability to direct support where it has the most impact.  

If you have any questions about this response or wish to engage with Energy UK and its members, we welcome further engagement. 

Rosie Nurse 
Policy Manager 
rosie.nurse@energy-uk.org.uk