Warm Home Discount (Amendment) Regulations 2025

Baroness Hayman of Ullock Excerpts

Wednesday 3rd September 2025 Grand Committee

Moved by

[Baroness Hayman of Ullock]

That the Grand Committee do consider the Warm Home Discount (Amendment) Regulations 2025.

Relevant document: 30th Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Baroness Hayman of Ullock) (Lab)]

My Lords, these regulations were laid before the House on 19 June 2025. Before I proceed, I draw the Committee’s attention to a correction slip that was issued on 4 July in relation to the draft instrument. It corrected a typographical error on page three of the draft regulations that are the subject of this debate. The change was from Her Majesty’s Treasury to His Majesty’s Treasury. Clearly, this does not affect the substance or intent of the legislation.

In February 2025 we consulted on expanding the warm home discount scheme, which provides low-income and vulnerable households with a £150 rebate off their energy bills. Today, we are considering the regulations that will allow us to implement those changes and bring this much-needed relief to around 2.7 million additional households. Since we took office, this Government have been committed to alleviating fuel poverty. Our review of the 2021 fuel poverty strategy made clear that progress has stalled and that we need a new plan to speed up progress on tackling fuel poverty. There are two principal ways of doing this. The first is by improving household energy performance and the second by expanding direct bill support to make energy more affordable.

Starting with the first, at the spending review in June, the Chancellor confirmed £13.2 billion for our warm home plan that will transform the housing stock and improve energy efficiency across the country, ensuring that less money is wasted on leaking, ageing homes that are expensive to heat. However, while we press on with that vital work, we recognise that many households remain at risk of fuel poverty and cannot wait until later in this Parliament to feel the benefits. That is why we are also expanding the warm home discount, providing vital support to those who need it most. This support will be available immediately, coming into effect this winter and, importantly, consumers do not need to take any action to receive it.

Since 2011, the warm home discount has helped around 3 million low-income and vulnerable households every year by reducing their energy bills when it is most needed. Under the current scheme, around 1 million low-income pensioners in receipt of pension credit guarantee credit receive the £150 warm home discount as an automatic rebate on their energy bills, and more than 2 million low-income and vulnerable households also receive rebates.

The statutory instrument before us seeks to amend the Warm Home Discount (England and Wales) Regulations 2022 to allow changes to the eligibility criteria for this coming winter so that more households can receive rebates. It will also extend the time period in which rebate notices can be issued to suppliers, so that as many as possible can be issued before the current regulations expire on 31 March 2026. The SI also amends the Warm Home Discount (Scotland) Regulations 2022 to increase suppliers’ non-core spending obligation by an amount considered to be commensurate to the expected increase in England and Wales.

This SI is a result of our consultation in February, in which we proposed to remove the high cost to heat threshold that we believed was unfairly excluding some vulnerable households from the scheme. This threshold often meant that families in almost identical circumstances were treated differently, with some receiving the rebate while others missed out. The current system also excludes many households in smaller properties because their home is not classified as high cost to heat, meaning that our support has not been reaching some of those who need it the most.

Removing the high cost to heat threshold will make all energy bill payers who receive a qualifying means-tested benefit eligible for the warm home discount. By bringing around 2.7 million additional households into the scheme, it pushes the total number of households that will receive the discount in winter 2025-26 up to around 6 million, which is one in five households in the UK.

We have a statutory duty to tackle fuel poverty. It is our duty as a Government to break down the barriers that prevent some of the most vulnerable families in the country receiving the support they need. The proposed regulations will help us to achieve this. I beg to move.

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[Baroness Hayman of Ullock (Lab)]

My Lords, I thank all noble Lords who have taken part in this important debate on an important issue for their contributions and for the broad support that the Committee has expressed for this statutory instrument. I shall cover the questions as best I can. First, the noble Baroness, Lady Coffey, talked about the fact that the scheme relates to electricity bills. She referenced the issues around rural heating—she mentioned Cumbria, where I live. It is a real issue for rural areas. We need to move away from fossil fuels. There are some challenges in rural areas on how we do that. I know that the department is working hard on this to understand those challenges because the transition needs to be countrywide, not just in one area and not another.

The noble Baroness also asked about universal credit. It is probably best if I ask my colleagues in the DWP to respond to that because I do not have the information and officials in DESNZ would not, so we will pass that on to the DWP if that is okay with her. She also asked about lower benefits to households. I stress that the impact assessment is based on our best estimates, but its purpose is to help those who are on low-income and means-tested benefits because that is the best way for us to get directly to the people who need the most support.

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[Baroness Coffey (Con)]

I thank the Minister for her response. There were a few questions, which I believe her officials will have noted. I appreciate that UC and DWP are different, but the Secondary Legislation Scrutiny Committee said that DESNZ assumes that 28% of people will not get this discount despite the other matter. I am sure that the Government will get the other Minister—the one from DESNZ—to reply, but I am grateful to this Minister for her responses so far.

[Baroness Hayman of Ullock (Lab)]

I am sure that we can comb through Hansard and make sure that proper, detailed information is provided to the noble Baroness on the issues that she raised.

This scheme has been running for 14 years now. Over that time, more than £4 billion-worth of direct assistance has been provided to low-income and vulnerable households. These regulations will build on that legacy by allowing support to reach more people this winter, including vulnerable households that were previously shut out of the scheme.

[The Earl of Effingham (Con)]

I have a point of clarification. The Minister responded to me most kindly about how the Government are going to invest in SMRs. I know that, if the noble Lord, Lord Howell of Guildford—a former Secretary of State for Energy—were here, he would stand up and say, “I’m speaking to all the SMR providers. They’re saying to me that they are ready to go. They’re doing it with other countries, but they need more progress from the UK”. Can the Minister come back to us at some point with a bit more detail on when are we going to see some progress with the SMRs? What is holding us back? Can we action this urgently?

[Baroness Hayman of Ullock (Lab)]

I am sure that the noble Earl and his colleagues are aware that we have made a very strong commitment to nuclear energy and are pushing forward on that in a way that previous Governments have not done. It is really important that we are investing in nuclear energy with that commitment. The department is working up exactly what that will look like; I am sure that, when the time is right, the noble Earl and his colleagues will hear more about SMRs.

Motion agreed.