The House of Commons passed Money and Ways and Means resolutions on 17 October 2022, approving expenditure and revenue raising under the powers of the Energy Prices Bill1. The Bill was brought from the Commons to the House of Lords on 18 October 2022 as HL Bill 59, and the Explanatory Notes accompanying it were ordered to be printed the same day1.
The Bill's stated purpose is "to address the negative social, economic and other impacts of the current unprecedentedly high energy prices"1. Its measures include the Energy Price Guarantee, which applies from 1 October 2022 and keeps the annual energy bill for the typical household to around £2,5001. The Energy Bills Support Scheme provides a £400 discount for all households in Great Britain, delivered through domestic electricity suppliers, and the Bill enables that scheme to be extended to Northern Ireland, where a similar scheme will provide the same level of support from 1 November 20221.
The Explanatory Notes set out the position without the guarantee. From 1 October 2022 the annual bill for a typical household was due to rise from £1,971 to £3,549, and forward gas and electricity prices as of 12 September 2022 implied a further increase in the price cap in January 2023, to around £4,2001. The notes attribute the crisis to global energy prices "compounded by the Russian invasion of Ukraine on 24 February 2022"1.
Support for households not reached through electricity bills is also covered. The domestic Alternative Fuel Payment is a one-off lump sum of £100 delivered through a household's electricity bill, with an AFP Discretionary Fund for eligible households that do not receive support that way, and heat network consumers also receive a £100 payment1. There are over 14,000 heat networks in the UK, providing heating and hot water to approximately 480,000 consumers1. Non-domestic customers, including businesses, charities, schools and hospitals, receive a discount on electricity and gas bills under the Energy Bill Relief Scheme1.
"The House of Commons passed Money and Ways and Means resolutions on 17 October 2022"
| Measure | Amount | Start |
|---|---|---|
| Energy Price Guarantee, typical household bill | around £2,500 a year | 1 October 2022 |
| Energy Bills Support Scheme, Great Britain | £400 discount | from October 2022 |
| Northern Ireland equivalent support | same level as GB | 1 November 2022 |
| Domestic Alternative Fuel Payment | £100 one-off | not stated |
| Heat network consumer payment | £100 | not stated |
Why it matters for households
The resolutions are a procedural step, but they unlock the spending that sits behind the bill reductions households are already seeing. The Energy Price Guarantee works by reducing the amount charged for each unit of gas and electricity used, so the benefit scales with consumption rather than arriving as a fixed sum1. The £400 Energy Bills Support Scheme is separate and is delivered through electricity suppliers1. Households on heat networks, and those using fuels such as heating oil rather than mains gas, are covered by different routes: the £100 payments and the discretionary fund1. The Bill also requires intermediaries to pass savings from energy price support through to end users who pay for energy through a third party, and requires certain generators receiving supernormal revenues to make payments where revenue for generated electricity is above a specified level1.
What happens next
A review of the scheme will consider how to support households and businesses with energy bills after April 20231. The Government intends to publish a review of the scheme in three months, looking at how best to offer further support to customers most vulnerable to energy price increases1. The scheme can run for a maximum of two years after the first date the regulations provide for the reduction of electricity or supply charges1. Spending by the Secretary of State under Clause 13(2) is capped at £100 million for each individual project unless the House of Commons agrees more, with quarterly reporting on that spending1.
Sources1 cited
- Energy Prices Bill - Explanatory Notes, bills-api.parliament.uk