Energy industry calls for expanded support as winter bills hit three-year high

The energy industry is pushing back against what it sees as an inadequate safety net. As winter approaches and household bills are set to climb to their highest level in three years, the body representing Britain's energy suppliers is calling on the government to do more for the millions of people who cannot afford to heat their homes.

Energy UK, the trade association, says the current system is broken. The £150 Warm Home Discount—a one-time payment available to people on means-tested benefits—reaches about six million households. But the industry body argues that another 2.5 million people need help too: those with medical conditions that require more heating, or homes so poorly insulated that energy consumption climbs regardless of thermostat settings. The math, in other words, does not add up. "Suppliers continue to do all they can to help their customers," said Dhara Vyas, the chief executive of Energy UK, "but as well as persistently high bills, record levels of debt show how the current system is failing to provide the right support to those in need."

The backdrop is grim. At the end of last winter, Ofgem—the energy regulator—reported that customers had fallen so far behind on their bills that they collectively owed suppliers £4.7 billion. Since then, wholesale energy prices have climbed further, driven partly by the conflict in the Middle East that began in February and partly by heatwaves across Europe that spiked demand for air conditioning and cooling systems. On Wednesday, Ofgem will announce the price cap for October onwards, and energy consultancy Cornwall Insight predicts it will rise by 4 percent. That follows a sharper 13 percent jump in July. Even the Prime Minister's decision to remove VAT from household electricity bills starting in October will not be enough to offset the increase.

Energy UK is proposing something more ambitious: a new "social discount" scheme that would cost £1.9 billion—nearly double what the government currently spends on the Warm Home Discount. The idea is to combine data about customers' income, health status, and energy consumption patterns, then use that information to offer targeted, adjustable support that can respond as prices and circumstances change. Some households could receive as much as £450 in annual support under the proposal. The scheme could be funded through levies on energy bills, as the current system is, or shifted entirely onto the taxpayer through government funding.

The proposal raises obvious questions. Combining personal data from multiple sources—income records, health information, energy usage—touches on privacy concerns that regulators and lawmakers will scrutinize. Finding an additional £1.9 billion in government money, or agreeing to raise energy bills further to fund it, will not be straightforward. Yet there is support from unexpected quarters. Adam Scorer, chief executive of the charity National Energy Action, said this is exactly the kind of approach his organization has been advocating for. He pointed out that the Warm Home Discount has risen by only £10 over the past decade, a pittance against the backdrop of soaring energy costs. "We desperately need a new approach," he said. "There will be a lot of detail to get right, but if government genuinely wants to provide breathing space for people in fuel poverty, it needs to take this challenge on and work with energy companies and charities to design something truly fit for purpose."

The last time energy prices reached these levels was in July 2023, which itself was still below the peaks of 2022 when Russia invaded Ukraine. That crisis prompted the Conservative government to commit around £40 billion in support. The question now is whether the current government will move with similar urgency, or whether millions of households will face another winter of impossible choices between heating and eating.