UK Government announces additional measures to tackle rising energy costs

Posted Thursday 8th September by Admin User

Further information on the announcements are available as part of the full statement from the UK Government and we will continue to provide updates as details emerge. We also await details of the Scottish Government’s recent announcement on the doubling of the Fuel Insecurity Fund.  

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The new Prime Minister Liz Truss has today announced further interventions to help households with the ongoing energy crisis. These include fixing the energy price cap at £2,500, based on annual costs for a typical dual fuel home, for a period of two years from 1 October 2022. An additional fund was also announced for households who are not currently protected by the domestic energy price cap, such as those reliant on heating oil or connected to a heat network. 

While this new cap rate is lower than the previously planned increase, which would have seen average dual fuel bills increase to £3,549 in October, this remains a major increase on the cap of £1,971 introduced in April 2022 and close to a doubling of the rate announced last winter (£1,277). Even with the £400 rebate which will be available as part of the Energy Bills Support Scheme and the other cost of living payments introduced earlier in the year, many households will still be facing considerable cost increases this coming winter.  

Additional measures have also been introduced to support businesses, with commercial energy costs also being capped at an equivalent unit cost to the domestic price cap. This will however only be in place for six months at present and will be reviewed in three months.   

As part of these announcements, the Prime Minister has also confirmed that there will be no further windfall tax on the profits of energy companies, while the green levies on domestic bills, equating to approximately £150 for the average household, will be temporarily removed.  

The UK Government also plans to improve energy security by increasing domestic energy production, including lifting the ban on fracking for shale gas in England and issuing additional licences for North Sea oil and gas production. However, the Scottish Government has confirmed that no fracking licences will be granted in Scotland. There is also a commitment to accelerate the deployment of renewable energy generation and initiate a new Energy Supply Taskforce.  

Further information on the announcements are available as part of the full statement from the UK Government1 and we will continue to provide updates as details emerge. We also await details of the Scottish Government’s recent announcement2 on the doubling of the Fuel Insecurity Fund.