Commons Sense

House of Commons · Ministers' Questions

Economy: Impact of Changes in Energy Support Schemes

Tuesday 7 February 2023 · 5 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 0 Partly answered 5 Not answered 0

Key points

  • Anum Qaisar asked about the potential economic impact of changes in energy support schemes, with the Minister confirming the Office for Budget Responsibility's estimate that the energy price guarantee has reduced peak inflation by 2.5 percentage points.
  • The Minister stated that business support over the last six months has been worth up to 18 billion, addressing concerns raised by Anum Qaisar about the adequacy of financial assistance for businesses.
  • Stewart Hosie inquired about the financial impact on high energy users and the Federation of Small Businesses describing the changes as "catastrophic," with the Minister responding that the scheme was time-limited due to its generous nature, costing 18 billion over six months.

Topics (select to filter)

Questions & Answers

Q1 Anum Qaisar
Economy Energy
Context

The question arises from concerns about changes in government's energy assistance programmes and their economic impact.

Question

What assessment has been made with Cabinet colleagues of the potential impact of changes in the Government's energy support schemes on the economy?

Answer from James Cartlidge

Inflation is our primary challenge, and I can confirm that the Office for Budget Responsibility estimated that the energy price guarantee has reduced the peak in inflation by 2.5 percentage points and that inflation is still nearly two percentage points lower than it otherwise would have been in Q2 this year, when the generosity of the scheme is reduced.

Partly answered

Not addressed: Did not directly address the question about the economic impact assessment made with Cabinet colleagues.

How: Changed Subject To Inflation

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q2 Anum Qaisar
Energy Business & Trade
Context

Concerns raised about the impact of new changes on small businesses, with an example given from a family-run café in Airdrie and Shotts.

Question

The Government are clawing back from the already pitiful financial assistance offered to businesses. Under the new scheme, businesses will now save only a few pennies for each unit of energy they use. Small businesses in my constituency of Airdrie and Shotts are already struggling to stay afloat under the new scheme. The owner of a small family-run café described to me how they have had to dip into personal savings to meet payments. Will the Minister reconsider the Government's plans to change the energy support scheme and instead expand support to better meet the needs of small businesses?

Answer from James Cartlidge

Of course it is important that we are cognisant of the challenges facing small businesses. The hon. Lady describes our support as “pitiful”. In the current period—the last six months—the available support for businesses with energy bills has been worth up to £18 billion. That is an extraordinary level of support, but we were absolutely transparent that that was not sustainable, that we would review it and that we would then have a less generous scheme but one that was still significant. To underline that, we will still have a scheme worth up to £5.5 billion. That remains a significant intervention and is worth, for example, up to £2,300 for a pub, or up to £400 for a small shop.

Partly answered

Not addressed: Did not directly address the request to reconsider plans and expand support for small businesses.

How: Defended Existing Scheme As Significant

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q3 Abena Oppong-Asare Lab Erith and Thamesmead
Energy
Context

Concerns raised about the forced installation of prepayment meters and higher costs for those using them compared to direct debit payments.

Question

Many will have heard the appalling stories of the forced installation of prepayment meters, which is precisely why Labour had called for a ban. But there is another scandal: the fact that those using prepayment meters pay more for their energy than those paying by direct debit. Why should those with the least pay the most? Labour will end this—will the Conservatives?

Answer from James Cartlidge

I am grateful to the hon. Lady, and I know this will be an important matter for the new Secretary of State for Energy Security and Net Zero. As for the Treasury position and our assistance in this matter, we should remember we have given the greatest support with energy bills to those with the greatest need. In the current financial year, we have given a cost of living payment of £650 for those on benefits, and in the next financial year there will be £900 of support. It is significant and it is comprehensive.

Partly answered

Not addressed: Did not address the specific ask about banning prepayment meters or addressing higher costs.

How: Focused On General Support Measures

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q4 Stewart Hosie SNP
Energy Business & Trade
Context

A constituent's story of a business owner seeing significant increases in quarterly energy costs and the challenge of finding £140,000 to cover future expenses.

Question

I have a constituent with a number of shops. He has seen his four-weekly energy costs rise from £12,000 last October to £27,000 today. Moving on to lower tariffs, but with the reduced energy support, he will still see that £12,000 every four weeks doubled, to £24,000. What advice would the Minister give to my constituent? How would he find the £140,000 off the bottom line in a business already operating on tight margins?

Answer from James Cartlidge

With great respect to the right hon. Gentleman, he was there when I gave the statement about the new scheme. I was clear with him about the fiscal position overall. He is welcome to write to me on that specific case. Obviously, I cannot comment on the detail of that individual case. What I can say is that we continue to put in place up to £5.5 billion of support with the energy bills discount scheme. That is a significant intervention and it remains a universal scheme with targeted support for the most energy and trade-intensive sectors.

Partly answered

Not addressed: Did not provide specific advice on how businesses can find funds to cover increased costs.

How: Redirected To Write For Details

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email
Q5 Stewart Hosie SNP
Energy Business & Trade
Context

Concerns expressed about the impact of reduced energy support schemes on small businesses, citing criticisms from various business organisations.

Question

Therein lies the problem: this will go to high energy users. The Federation of Small Businesses described the changes as “catastrophic” and the beginning of the end for tens of thousands of small businesses, the British Chambers of Commerce said that an 85% drop in the financial envelope of support will fall short for thousands of UK businesses who are seriously struggling, and UKHospitality criticised the sudden and sharp drop in support, estimating the move would cost that sector £4.5 billion in the next 12 months. Why does the Minister think they were all wrong and he is right?

Answer from James Cartlidge

As I said to the hon. Member for Airdrie and Shotts (Ms Qaisar), we were clear when we created the scheme to support businesses with their energy bills that it had to be time limited because of the generosity of the support—£18 billion over six months. We were absolutely transparent about that. But we have maintained a universal scheme covering businesses, charities and the public sector. Yes, it is less generous, but it remains significant. As I said, he is welcome to write to me with the specific case he raised.

Partly answered

Not addressed: Did not provide an explanation of why business organisations' criticisms were incorrect.

How: Defended Current Scheme'S Significance

Was this summary accurate? Tell us

How accurate was this summary? (1 = poor, 5 = spot on)

Get updates like this by email