Playing off billpayers against taxpayers is ‘zero sum game’

Energy secretary Grant Shapps has been warned not to sacrifice bill support in favour of tax cuts.

Peter Smith, director of policy and advocacy at the charity National Energy Action (NEA), told Utility Week that playing off the interests of energy billpayers against taxpayers over financial support is a “zero sum game”.

It comes after Shapps suggested that the government was unlikely to assist people with energy bill increases this winter.

In a recent interview with The Times, Shapps said: “We don’t want to be in a position…of having to constantly pay energy bills, because the answer — we’re having to tax people in order to pay it back to people — doesn’t actually mean that money doesn’t come from nowhere.”

In response, Smith told Utility Week: “Playing off the interests of billpayers against taxpayers is a zero sum game. Irrespective of recent falls (in energy bills) the majority of people will be hugely alarmed about heating their home this winter.

“National Energy Action believes the government must provide further targeted support this winter to avoid needless harm and suffering and meet their commitments to consult on deeper protections for the most vulnerable consumers from next year.”

Shapps’ comments have also caused ire among the Liberal Democrats, whose spokesperson for energy and climate change Wera Hobhouse said: “Countless people are already wondering how they’ll pay for eye-watering energy bills this winter, yet Conservative ministers haven’t got a clue about their worries.

“The government could introduce a proper windfall tax on the massive super-profits of oil and gas producers to pay for extra energy support, yet they seem determined to treat fossil fuel giants with kid gloves.

“People are sick and tired of this uncaring government refusing to help with the cost-of-living crisis.”

There have been suggestions that unspent funds from the government’s Energy Bills Support Scheme (EBSS) should be redistributed to help those worst affected by costly bills.

In a previous interview with Utility Week, Smith said: “Typically those households that are on traditional prepayment meters have had to pay higher prices from day one of this energy crisis. We would look to them as a priority group for any further action for supporting them during this autumn and winter.

“The other group that are still struggling, paying much higher than those households that are on direct debit or even now prepayment meters, are those households that are on standard credit. We have known for a long time that they continue to pay a large premium.

“I think it’s £140 now additionally each year just by virtue of paying by cash or by cheque. We are very keen that the government look to spread the benefit of their welcome intervention for prepay customers to pay the same as direct debit customers to those households that are on standard credit.”

Introducing more protections for the most vulnerable energy customers is a core element of Utility Week’s Action on Bills campaign, which is urging the government to introduce support this winter ahead of more targeted measures by April 2024.

The key asks of government are:

• A clear plan for targeted support on energy bills for vulnerable customers to be put out to consultation before the summer recess with a target of putting this into action by April 2024
• A revised Energy Bills Support Scheme to be brought in for next winter while a more targeted approach is being designed
• Defra to support social tariffs in the water sector through a clear funding commitment and a definitive stance on whether there should be a single social tariff