Utility Week

12 | JULY 2022 | UTILITY WEEK Energy Analysis Bills support: where will itend? The scale of the government's £15 billion cost of living support package has been warmly welcomed as a meaningful intervention. But policymakers must now fi nd more sustainable, long-term solutions to the cost of living crisis. I t looks like it may turn out to be history's most expensive post-party clean up. Until very recently, the industry consensus was that any government intervention to deal with the energy crisis was unlikely to happen until later in the summer, when the picture would be clearer on the precise scale of the hike to the price cap hike facing customers this October. However, Ofgem chief executive Jonathan Brearley's announcement that the price cap looks set to rise to £2,800 this winter, issued the day before the publication of the report into the now notorious Downing Street par- ties, appeared to turbo-charge the process. This teed up Rishi Sunak's announce- ment two days later, in which the chancellor announced a fresh £15 billion of support for cash-strapped customers. Josh Buckland, a former government spe- cial adviser, muses that this speedy time- table marks a departure from the delays that typically characterise high-pro† le energy announcements. "You can take the cynical view that it was about the Sue Gray report," he says. "There was a general view that they needed to act sooner rather than later." Paying tribute to the pre-Sunak announce- ment campaigning of the welfare charities, spearheaded by consumer champion Martin Lewis, he says: "They've done a really good job of pushing energy up the agenda." There were industry nerves ahead of the announcement that the government would come out with proposals which would prove unworkable due to the low level of engage- ment that had taken place beforehand. The outcome was a "pleasant surprise", says one industry source, who adds that the package was "very generous" and much bet- ter targeted at low-income households than Sunak's † rst stab at tackling the issue earlier this year. Matt Copeland, head of policy and public a" airs at National Energy Action, says the £15 billion package will mitigate the bulk of this year's bill hikes for lower-income house- holds. "The absolute worst-case scenario has been averted." However, even this generous package doesn't take away the pain for those house- holds who were already struggling to avoid fuel poverty before the recent surge in prices took hold. In ation will eat up much of the support Adam Bell, the former head of energy strat- egy at the Department for Business, Energy & Industrial Strategy (BEIS), points out that such individuals will be under "tremendous pressures" from increases in other costs, notably food, and will still face budgeting struggles. "With inœ ation at 10%, a lot of that money is going to vanish with the increased cost of "The absolute worst- case scenario has been averted." Matt Copeland, head of policy and public a airs NEA "There's still a lot of people who are going to fi nd this winter, very, very challenging, and I would expect bad debt to increase as a result. Adam Bell, former head of energy strategy, BEIS "If they're going to do anything good value in the medium term, it needs to be something that is structural rather than just near-term funding." Josh Buckland, a former government special adviser "We are still looking down the barrel of a recession, because of the remaining impact on people's disposable incomes. How many shocks like that can you aff ord?" Daniel Newport, former head of heat and buildings strategy, BEIS Quote, unquote

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