The price cap on default and standard variable tariffs was set to fall to £1,923 a year for typical household consumption in October 2023, according to a Commons Library debate pack published on 20 October 20231. The fall followed wholesale energy prices dropping below the level of the Energy Price Guarantee (EPG), the scheme introduced under then Prime Minister Liz Truss from 1 October 20221.
The EPG was set at £2,500 a year for typical levels of consumption and was initially planned to last two years1. Following changes announced in the spring Budget in March 2023, it was to remain at £2,500 until the end of June 2023, then rise to £3,000 from July 2023 to March 20241. The EPG is set to end in 20241.
The briefing set out the wider support measures and their status:
| Measure | Detail | Status |
|---|---|---|
| Energy Price Guarantee (EPG) | £2,500 a year for typical consumption, then £3,000 from July 2023 to March 2024 | Set to end in 20241 |
| Energy Bill Support Scheme (EBSS) | £400 discount for every household with a domestic energy connection in GB, winter 2022 to 2023 | Ended in March 20231 |
| Alternative Fuel Payment (AFP) | One-off £200 credit for households using heating oil, LPG or coal | Paid from February 20231 |
| Warm Home Discount | £150 discount each winter for those in receipt of certain benefits, from suppliers with over 50,000 customers | Ongoing obligation1 |
Despite the fall in the cap, the briefing stated that annual bills for typical consumption under the cap would still be almost £800, or 69%, above their summer 2021 levels1. It also recorded that the price cap increased by 54% in April 2022, and that Ofgem had planned to increase it by a further 80% on 1 October 20221.
The briefing noted that spending on energy rose with income, from around £23 per week in 2021-22 among the 10% of households with the lowest incomes to £32 per week among the 10% with the highest incomes, but took a larger share of total expenditure in lower income groups: 7.4% in the lowest decile and 6.9% in the second, compared with 3.5% in the highest1. It also reported increases in self-disconnection among smart prepayment meter customers, with electricity self-disconnections of more than three hours rising from 165,000 in the final quarter of 2021 to 269,000 in the first quarter of 2023, a 63% increase, and gas rising from 193,000 to 534,000 over the same period, an increase of 178%1. Those data cover around half of the 4 million customers who have prepayment meters1.
The briefing also recorded that the government announced in the November 2022 autumn statement that it would take a "new approach to consumer protection from April 2024", working with consumer groups and industry on options including social tariffs, and that this consultation had not yet been published1. An open letter to the Prime Minister dated 29 September 2023 calling for a social tariff, supported by over 130 organisations, argued that a social tariff would offer a long-term solution to fuel poverty1.
Why it matters for households
The cap figure is an illustrative annual bill for typical consumption, not a maximum bill: it caps unit rates and standing charges in each supply region, so a household using more energy pays more1. The October 2023 level of £1,923 sat below the EPG level of £2,500, meaning the guarantee no longer determined what most households paid, though bills remained far above their summer 2021 levels1. The EBSS £400 discount and the £200 Alternative Fuel Payment had both finished or been paid out, so the support that softened winter 2022 to 2023 was no longer in place1. For a home's energy independence, the practical position was that the capped unit price, not a government-set annual figure, again governed the cost of each unit of gas and electricity bought on a default tariff1.
What happens next
A Westminster Hall debate on energy social tariffs was scheduled for 23 November 2023, chosen by the Backbench Business Committee and to be opened by Marion Fellows MP1. The briefing also records a debate scheduled for 3pm on 26 October on the same subject1. The government's consultation on a new approach to consumer protection from April 2024 had not been published1.
Sources1 cited
- CDP-2023-0202.pdf, researchbriefings.files.parliament.uk