Contribution
My Lords, these regulations were laid before this House on 2 February 2026. The warm home discount scheme has been a key policy in the Government’s approach to tackling fuel poverty and reducing the energy costs of low-income and vulnerable households, ever since its inception in 2011. Last year the Government expanded the scheme, removing the high cost to heat threshold to ensure that around an additional 2.7 million of the poorest households across Great Britain received a £150 rebate off their energy bills this winter, with nearly 6 million households now eligible. The current scheme period ends on 31 March 2026, and new regulations are required to continue the scheme beyond this date.
In September we consulted on continuing the warm home discount scheme up to and including the winter of 2030-31. The consultation respondents, including consumer and advocacy groups, charities and industry, strongly supported proposals to continue the scheme, and to continue to provide rebates via automatic data matching. Today we are discussing these regulations, as well as some additional changes to the scheme, which allow eligible households across England and Wales in or at risk of fuel poverty to continue to receive the rebate for the rest of this decade.
These regulations will extend the scheme in England and Wales for five more years from 2026, until they expire in 2031. The regulations will continue to oblige energy suppliers with more than 1,000 domestic accounts to participate in the scheme. These regulations will ensure that, as is the case currently, energy suppliers with fewer than 1,000 domestic accounts can choose to participate voluntarily in the scheme.
Under the scheme, participating energy suppliers are obliged to provide support to eligible households through a rebate provided directly to their energy bill, valued at £150. Eligibility for the rebate will continue to be set out by the Secretary of State with an eligibility statement, which is published for each scheme year. Following the removal of the high cost to heat threshold and the expansion of the scheme in 2025-26, the Government have committed to maintaining the current eligibility for the rebate in England and Wales, based on receipt of means-tested benefits, for a further five years.
Eligibility for the scheme remains unchanged but these regulations introduce a more streamlined approach to administration, without impacting eligibility. The existing core group 1 and core group 2 will be merged into one core group in England and Wales, with a view to enabling clearer communication and messaging to potentially eligible households. This change was broadly supported by consultation respondents.
We put out a range of communications ahead of and during each scheme year to eligible households, and will continue to do so for the next scheme period. The automatic data-matching process for the core group in England and Wales will continue, using data held and processed by the Department for Work and Pensions, with the majority of eligible households—typically around 96%—expected to be automatically data-matched, meaning that they will receive the rebate without taking any further action.
These regulations set out a range of permitted activities, overseen by Ofgem, through which energy suppliers can deliver towards their non-core obligation of supporting eligible households in fuel poverty or in a group that are at risk of fuel poverty. Permitted activities within industry initiatives include benefit entitlement checks, energy-efficiency measures, energy advice, debt relief and financial assistance payments of £150. Scheme energy suppliers can also choose to dedicate non-core spend towards the park home scheme, which provides eligible households with £150 of support towards their energy bill.
The regulations also introduce changes to the administration of the scheme and enhance consumer protections for eligible households. They include a new provision to enable the Secretary of State to direct suppliers to communicate directly with their own successfully data-matched customers to provide further information about the scheme, including information related to automated decision-making. In addition, the regulations will replace fixed spending targets with annual estimates, based on the number of eligible households expected to benefit from a rebate each winter, to better predict scheme costs.
Tackling fuel poverty is a priority for this Government. We recognise that too many people cannot afford to heat their homes at a reasonable cost. That is why in January we published our new fuel poverty strategy, alongside our Warm Homes Plan, to ensure that many more fuel-poor households are protected by 2030. Through these regulations, the warm home discount scheme will continue to provide vital support for eligible households each winter at the coldest time of year when support is most needed. I beg to move.