Current inflation is being driven by rising energy costs, provoked by surging demand after the pandemic as well as Russia’s invasion of Ukraine, which in turn has put pressures on living costs. The Government has taken steps to help the lowest-income households through these extraordinary times: reducing the Universal Credit taper rate; increasing the National Living Wage; freezing fuel duty for the twelfth consecutive year; and launching a £500 million Household Support Fund. 

Since Ofgem’s confirmation of the first price cap rise, the Government has put forward an ambitious support package to help both lower and middle-income earners with the immediate adjustment. This includes a £400 grant for energy bills for all. Further, a non-repayable £150 cash rebate is being provided for homes in Council Tax bands A-D, equivalent to 80 per cent of all households and £144 million of discretionary funding for local authorities to support those not eligible for the council tax rebate. This means that hard working families will receive £550 with lower income families receiving even more help. 

But the Government knows we need to go further, that is why the Prime Minister is introducing an Energy Price Guarantee (EPG) which will give people certainty with their bills. The EPG now applies and will discount the unit cost for gas and electricity use. 

This guarantee, which includes the temporary suspension of green levies, means that a typical household will pay no more than £2,500 per year for each of the next two years. This will save the typical household £1,000 a year. It comes in addition to the £400 Energy Bill Support Scheme. 

While I appreciate your disappointment over Ofgem's decision, it was in reaction to the record rise in global energy prices. The energy price cap continues to help insulate millions of customers from even higher bills, and by extending the energy price cap beyond 2023, the Government will be protecting 22 million households who are on default tariffs. Ofgem is also working to diversify our long-term sources of energy to protect customers from similar future price shocks.  

More broadly, I know that the Government is working to reduce bills and tackle fuel poverty, for example through the introduction of home energy efficiency measures. The Government’s Energy Company Obligation and the expanded Warm Home Discount schemes will also provide at least £4.7 billion of extra support to low-income and vulnerable households between 2022 and 2026.