Prime Minister’s energy price guarantee recognises scale of crisis looming this winter

The Prime Minister has announced new measures to lower the cost of household energy bills this winter. Liz Truss told the Commons that the energy bill of a typical home will be capped at £2,500 a year following government intervention.

The figure is double last October’s price cap of £1,277 a year but significantly less than the £3,549 price cap announced by regulator Ofgem at the end of last month. The Prime Minister also confirmed earlier cost-of-living payments of £400 announced in May will still be paid this winter.

It has also been reported that government ministers are drawing up plans for a public information campaign to encourage households to reduce their energy use this winter.

The package of support will be reviewed early next year but the government has indicated that it could last until the next election in 2024. We're calling for that two-year period to be used wisely in dealing with a fundamental issue at the heart of the current crisis – the UK’s appallingly inefficient homes.

We're calling on the government to launch a national retrofit programme as well as ensuring that older vulnerable households are accessing all available financial support this winter.

"We are relieved that the new Prime Minister has responded to the severity of the crisis that is set to unfold this winter and is applying a remedy that goes some way to matching the magnitude of the problem.

“Even so, this is not the perfect solution for the most vulnerable who will see their energy costs doubling compared to last winter. This may well lead to miserable months of financial and personal hardship, including for a significant proportion of older households on fixed incomes. We want to see the government redoubling its efforts on awareness-raising around pension credits as 800,000 are still missing out on the additional cost of living support this provides.

“The government must ensure a two-year window of energy price stability and use it wisely to deal with a fundamental issue at the heart of the problem – the UK’s appallingly inefficient homes. If the government is going to advise households on lowering energy usage, it also has a significant role in helping homeowners and renters reduce the huge amounts of energy wasted through poor-quality, draughty homes. Tackling energy efficiency will not only help address the energy cost crisis but also the climate crisis by making a significant contribution to the government’s net zero target.

“We urgently need a national retrofit programme to make homes more energy efficient as part of a broader move to improve people’s homes. This should be supported by a network of ‘Good Home Agencies’ across the country to provide advice, access to finance and practical support.”