Warm Home Discount (Amendment) Regulations 2025

Earl of Effingham Excerpts

Wednesday 3rd September 2025 Grand Committee

My final point is that I would encourage the Government to properly evaluate and monitor the health and associated benefits that will come from these payments. Living in fuel poverty has huge impacts on people’s health and there are knock-on costs for the NHS. As part of the evaluation process, it would be good if the Government could take the time to analyse the changes from this additional spending. From these Benches, however, we really welcome these proposals.

[The Earl of Effingham (Con)]

My Lords, I am grateful for the opportunity to speak to this statutory instrument, which proposes a further expansion of the warm home discount scheme.

I start by confirming that His Majesty’s loyal Opposition fully support the principle of shielding vulnerable households from fuel poverty. The extension of support to an additional 2.7 million households, including working-age families with children, is of course a positive and welcome step, particularly as we approach another potentially challenging winter. There is no doubt that many people will benefit from this measure.

However, while the Government’s intentions are commendable, their method of implementation raises important questions. Our understanding is that this expansion is not being funded through general taxation or through efforts to improve efficiency within the energy system. Instead, it relies on increasing green levies on energy bills—the very costs that will be borne by working households. According to the Government’s impact assessment and as we have heard from noble Lords, this will result in an average increase of £15 per household per year, bringing the total cost of the warm home discount to £37. That represents a 60% rise to the average dual fuel bill payer, and it should be highlighted that this was not prominently featured in the announcement. This approach surely risks creating a circular dynamic. Higher energy costs driven by policy decisions are then partially mitigated by support schemes funded, conversely, by those same rising costs. While the short-term relief is real, the medium- to long- term implications deserve scrutiny.

We must also consider the broader context. The Government have pledged to reduce energy bills by £300 per year, a commitment that seems increasingly difficult to reconcile with policies that contribute to rising costs. This statutory instrument, while helpful to some, may inadvertently deepen our reliance on cross-subsidies to mask the underlying changes in our energy strategy. The ambition to reach clean power by 2030 is totally laudable, but challenging. If the path taken results in higher bills for ordinary working families, we must ask whether the strategy is serving its intended purpose. Would it not be optimal to agree that clarity and simplicity often yield the best outcomes? If our goal is to reduce fuel poverty, which it absolutely should be, then should we not focus on making energy supply more abundant and affordable, not more expensive and constrained?

A more balanced approach to funding the energy transition is needed, one that prioritises domestic supply, domestic storage and nuclear alongside renewables. It is time for greater transparency about the costs and trade-offs involved, because the current path places a disproportionate burden on those hard-working people least able to bear it. For these reasons, while we support the principle behind this measure, we urge the Government to reconsider the funding mechanism and the broader strategy that it reflects.

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[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.