Who Gets Energy Support? New Rules Revealed
Rachel Reeves outlines new energy bill support rules as UK faces rising costs. The plan targets aid based on need amid the growing energy crisis.
Currently within the government, contingency planning is the single most critical priority.
Amidst all of this, there is a cluster of questions that begin with: "What if?"
The repercussions and consequences of the conflict involving Iran are already immense, and the biggest unanswered question looms over everything: How long will this last?
For Chancellor Rachel Reeves, this presents an economic shock requiring a real-time response.
Later in the Commons, she will focus on the domestic implications of the unfolding situation in the Middle East.
I am told that her speech to MPs will cover three key points, beginning with a brief update on how the conflict is impacting the economy.
There will also be a section on energy security, featuring a pledge to construct new nuclear power stations. Legislation to enable this is expected later this year and will be outlined in the King's Speech in May.
What is being described as "a new anti-profiteering framework" will also be established; this could grant the regulator—the Competition and Markets Authority—new, time-limited, and targeted powers to tackle companies that exploit price hikes to fleece customers.
Reeves will then address the principles guiding further support for families should energy bills rise in the coming months. Given that the energy price cap for gas and electricity remains in effect until the end of June, ministers have the time to determine what measures might be feasible, affordable, and necessary.
The Chancellor will articulate her view that providing universal support to every household is, in all likelihood, neither appropriate nor affordable.
Universal support was provided during Liz Truss's tenure as Prime Minister—shortly after Russia's full-scale invasion of Ukraine—the cost of which had significant repercussions for public finances.
And this occurred shortly after the massive scale of government intervention witnessed during the pandemic. People still debate whether those interventions were good ideas or not; however, when taken together, they help explain why the cost of servicing the national debt now accounts for roughly £1 out of every £10 of government spending.
Another message we can expect to hear from ministers is—as one individual put it to me—to "push hard on renewables and nuclear."
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While Conservatives, Reform UK, and some Labour MPs are calling for the approval of new oil and gas drilling in the North Sea, Energy Secretary Ed Miliband told a meeting of Labour backbenchers last night: "Anyone who tells you that new licenses in the North Sea will make any difference to prices is not telling the truth. This is because gas is bought and sold on international markets, and that is where the price is determined."
Miliband’s focus today is on plug-in solar panels, which he says will become available for purchase in the UK later this year. It is expected that these will go on sale in supermarkets over the coming months; priced at a few hundred pounds, they can be installed on balconies or in gardens.
The Energy Secretary’s team looks with envy at the popularity of these devices in Germany, and at how Spain—thanks to its adoption of renewable energy—remains less susceptible to the volatility of gas prices.
Ministers work hard to prepare for various scenarios, to keep us updated, and to manage expectations regarding their actions and readiness—all while striving to ensure that no sense of panic or anxiety is inadvertently created.
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