15 October 2012
Dear Colleague,
As winter approaches, I am writing to let you know how the Government is helping your constituents reduce their energy bills and keep their homes warm.
The Government cannot control volatile world energy prices, which account for around half the current domestic energy bill, but there are a number of ways it can help consumers to cut their energy bills, including additional support for those on low incomes and the vulnerable.
CONSUMER ADVICE
Big Energy Saving Week
One reason for writing now is to draw your attention to Big Energy Saving Week (22-28 October). This week of activity is being co-ordinated by Citizens Advice and supported by funding from the six largest energy suppliers, which was negotiated by the Government earlier this year. The campaign brings together consumer groups, the Energy Saving Trust, third sector organisations, Government and Ofgem to help consumers find out how they can lower their energy bills.
Citizens Advice and its partners aim to reach around 50 million people through this campaign, including around 400 events in communities throughout Great Britain, with a particular emphasis on reaching vulnerable consumers.
I encourage you to support any events being held in or near your constituency. To find out more, please go to the campaign website at: www.bigenergysavingweek.org.uk.
Year round help
In addition to this week of action, consumers can call the Energy Saving Advice Service (ESAS), a phone service set up by the Government:
ESAS: 0300 123 1234*
*Calls are charged at standard national rate
ESAS provides advice on how to reduce bills and make homes more energy efficient. It also gives details on eligibility for the schemes mentioned below, including which parts of the UK they apply to. Advice can also be found online at www.direct.gov.uk/energyhelp.
USING LESS ENERGY
Most of our homes have some basic insulation, but more than half have neither enough insulation nor an efficient condensing boiler.
Green Deal
In Great Britain the Green Deal will let householders pay for a wide range of energy saving home improvements through savings expected to be made on their energy bills. Since 1 October 2012 authorised Green Deal assessors and providers can offer ‘whole house’ property assessments and discuss packages of improvements with householders. From 28 January 2013 Green Deal finance plans may be agreed. Your constituents can find out more, including how to book an assessment, from ESAS. In addition, Green Deal Quick Guides can be found at: www.decc.gov.uk/greendeal/quickguides.
Extra help
The Government continues to provide heating and insulation measures to low income and vulnerable households in England through the Warm Front scheme. This support is free for most people who are eligible for the scheme, with grants available worth up to £3,500 (for homes with mains gas) and £6,000 (for homes off the gas grid). In September we changed the eligibility rules, meaning even more people can access this help, with a budget of up to £100m this year.
In addition, the devolved administrations have energy efficiency schemes and many energy companies continue to offer free or subsidised basic home insulation packages. ESAS can advise customers on what is available where they live.
In early 2013 a new Energy Company Obligation (ECO) will run alongside the Green Deal, providing extra help for properties that are harder to treat and for those households who are most in need. This will include support for a range of heating and insulation improvements to low income and vulnerable households.
BILL SUPPORT
Low income and vulnerable consumers
In Great Britain the Warm Home Discount scheme will help around two million low income and vulnerable households with their energy costs. This includes more than one million of the poorest pensioners, who will receive an automatic £130 discount on their electricity bill by 31 December 2012. Government is writing to all those potentially eligible for the discount by February 2013. Over a million pensioners will receive a letter telling them they will receive the discount automatically and do not need to claim. The small number of customers who get a letter asking them to confirm their eligibility must call the Warm Home Discount Scheme helpline by 13 March 2013.
Other groups, such as low income families and those on low incomes with long-term illnesses and disabilities can also benefit through the scheme. Consumers should contact their energy supplier to see if they are eligible.
Cold Weather Payment
Cold Weather Payments provide help with additional costs of heating during periods of severe weather to vulnerable people who live in an affected area and who are in receipt of certain benefits. In 2011/12 an estimated 5.2 million Cold Weather Payments, worth £129.2 million, were paid. The Government has increased this support permanently to £25 for each qualifying period of cold weather.
Help for older people
The Winter Fuel Payment helps older people with their energy bills, with payments made from November to the end of December. This equates to £200 or £300 – depending on age – and in 2011/12 the scheme helped over 12.6 million older people in over 9 million households.
GETTING THE BEST TARIFF
Consumer power
Customers who have never switched can save up to £200 a year by changing energy supplier and paying by direct debit.
In addition, collective purchasing and switching – when a group of consumers come together to negotiate a better deal with their gas and electricity suppliers – have huge potential to ensure consumers get a better deal on their gas and electricity bills. For example, about 38 000 people have switched as a result of the Which? Big Switch initiative. Which? estimates they will save an average of £223 per year.
To help consumers harness their collective power the Government has announced a £5 million competition to support innovative collective switching schemes run by local authorities or the third sector. A consumer information leaflet is available to help consumers who are considering joining a collective purchasing or switching scheme (http://www.decc.gov.uk/assets/decc/11/funding-support/5368-collective-purchasing--guidance-for-consumers.pdf).
Greater transparency
If asked to do so, energy suppliers are now obliged to put the consumer on the best tariff. Suppliers will also tell customers about the best tariff – and how to get it – at least once a year and also when a fixed-term contract is coming to an end. In addition, a number of low income and vulnerable households assisted by the Warm Home Discount scheme will receive a second communication each year to help them get the best tariff.
I hope this information will help you to explain to your constituents how they can reduce their energy bills over the winter period.
Edward Davey
Secretary of State for Energy & Climate Change
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