Warm Home Discount (Amendment) Regulations 2025

Earl Russell Excerpts

Wednesday 3rd September 2025 Grand Committee

[Baroness McIntosh of Pickering (Con)]

My Lords, I thank the Minister for stepping into the breach and presenting the regulations in the form of the statutory instrument before us. I share and echo the concerns of my noble friend, without going into any great length, who was an excellent Secretary of State at the Department of Work and Pensions at a most difficult time during Covid—a big applause to her and her department at the time, and the work that it continues to do.

I welcome much of the content of the regulations. I forgot to declare my interest as president of National Energy Action and co-chair of the All-Party Parliamentary Group for Water, which will be significant when I come on to smart meters. However, the Whip on duty will remind me that I have said this in the past, so I am going to say it again because I want to record it at every opportunity. I do not know if it is something that the department might look at but, if the noble Baroness is not able to answer today, can she write and place a copy of the letter in the Library? Those households that are most in need of energy, such as in the north of England, Scotland and many vulnerable areas would have qualified for, say, £300, so fewer households would have benefited, but it would have had a much bigger impact on fuel poverty in that regard. Is that something that the Government are minded to look at?

Again, it is not part of these regulations but it is something that National Energy Action would like to place on the record but that I do not necessarily agree with. It would like to see a social tariff. My understanding is that there was a social tariff for energy prior to the warm home discount. I was trying to explain to NEA that you either have one or the other. Social tariffs operate quite effectively in the water sector, but I do not see how we can have both. I presume that that is something that the department under successive Governments has looked at. I should like to find out and have placed on the record for National Energy Action’s benefit what the current Government’s thinking is. Are we going to stick with the warm home discount, which would be my preference, or are we going to have both a warm home discount and the social tariffs?

My more radical thinking, when the Minister was referring to the contents of the regulation and the result of the consultation, was about transforming the housing stock. The Government have granted £13.2 million, not an insignificant sum of money, in that regard. I have a mounting concern that there is housing stock—I see this locally, and I am sure it is in other parts of the country as well—that would benefit from just a bit of an upgrade in having double-glazed windows and maybe a bit of stuff in the wall cavity areas and the roofs to make those houses more habitable. Obviously that would reduce the cost of heating, so it is not going out the window or through the walls, so to speak.

The plan I propose is that we reverse VAT. Take VAT off renovations and put it on newbuild. That way, I argue that it would be neutral. Obviously, it would pass on to the purchasers of new houses, but it would greatly increase the housing stock. Again, that is not in the regulations, but is it something that the Government might consider?

In preparing for today, I am grateful to the Secondary Legislation Scrutiny Committee for its 30th report, where it did a short analysis on this. Its conclusion, as my noble friend Lady Coffey referred to, was:

“We note that the percentage increase in the levy on billpayers and the impact of the expansion of the Scheme on the number of recipients and overall spending are expected to be significant”.


It is no secret that the major parties are deeply concerned about the cost of living crisis, which is ongoing. We have had the higher cost, for those who are not on a fixed tariff, of energy prices going forward for this winter. As my noble friend pointed out, that is going to mean a higher increase for those households that do not benefit to pay for the significant amount of money, which we know to be approximately £1 billion, up from £600 million in the past.

The Government could look at other measures as well. I have long been interested in the possibility of having a smart meter. Anna Walker did a report on water efficiency at the same time as there were the reports by Martin Cave on competition and Michael Pitt on flooding in about 2007 or 2008. Of those three reports, the Walker report on water efficiency never really got any legs. However, she gave very useful advice like, “Don’t run your water when you’re brushing your teeth, but in particular don’t run the hot water because you’re literally putting hot water that you have heated down the system, which is ridiculous”.

Is there a possibility that energy and water would both be governed by the same smart meter? Are the Government aware that currently—my authority for this is the Radio 4 programme “You and Yours”, which I happened to listen to on, I think, Friday—there is evidence that smart meters do not work in rural areas? I know the Minister lives in a deeply rural area. I have been reluctant to fit a smart meter for that reason; there is no point in having one fitted if it is not going to work. Apparently they will give you all these other gadgets to help it work, but still it will not.

If smart meters are not working and people are not able to monitor true energy use then that is one point, but if we were able to develop smart meters that covered both water consumption and energy consumption then that would be a big plus for households. So I give a cautious welcome to these regulations, and I am grateful for the opportunity to make the few comments that I have.

[Earl Russell (LD)]

My Lords, this instrument brings forward much needed and real expansion of a vital scheme that we believe will have significant positive impacts. We welcome the proposed expansion of the warm home discount, which aims to bring financial relief to millions more households across Great Britain that are grappling with the brutal realities of fuel poverty and escalating energy bills.

What we have here is, in essence, a doubling of those who will be eligible for the £150 rebate on energy bills. This will bring vital relief to many families who are struggling, but the scale of the challenge is immense. In England alone, some 2.7 million households are trapped in fuel poverty. The average fuel poverty gap has soared to an alarming £407—a near 60% increase since 2020 in real terms. Disturbingly, the number of households forced to spend over 10% of their income on energy bills, after housing costs, has more than doubled since 2020 to 9 million households in 2024. Furthermore, energy debt and arrears hit a record £3.85 billion in December 2024.