Committee publication · Special Report · 21 January 2026 · HC 1624

4th Special Report – Tackling the energy cost crisis: Government Response

From: Energy Security and Net Zero Committee

Summary

This document is the UK Government's response to the Energy Security and Net Zero Committee's October 2025 report on tackling the energy cost crisis. The Government outlines actions on support schemes (data sharing, Warm Home Discount expansion, social tariff strategy), consumer protections (debt relief, poverty premium, standing charges), and billing issues (smart meter rollout, Energy Ombudsman powers). It commits to £150 bill reductions from April 2026 and defends existing policies while partially accepting committee recommendations.

Key findings

Government pledges £150 average reduction in household energy bills from April 2026 via Autumn Budget measures; Warm Home Discount expanded to around 6 million low-income households by winter 2025–26 (up 2.7 million from current 3 million).
On data sharing: Government commits to accelerating progress through National Data Library and cross-departmental working group, but declines to establish a dedicated 'Energy Data Sharing Taskforce' by winter 2026–27 as recommended.
On social tariff: Government positions Warm Home Discount as existing form of targeted support; defers social tariff consultation, citing focus on clean power transition by 2030 and Warm Homes Plan upgrade programme.
On energy debt: Government supports Ofgem's Debt Relief Scheme (statutory consultation closed 18 December 2025) and rejects recommendation to fund it from network windfall profits, citing Ofgem's responsibility for price controls under RIIO-3 framework.
On smart meters: Government proposes ambitious new framework requiring suppliers to complete rollout by end of 2030 and recover non-functioning meters within 90 days; consultation closed 3 October 2025.

Government position

Partially accepts. Government welcomes the committee's inquiry and broadly aligns on cost-of-living priorities but declines or defers several specific recommendations. It rejects: mandatory equal price caps across payment methods (defending varying administrative costs); dedicated Energy Data Sharing Taskforce with winter 2026–27 deadline (proceeding via existing channels); immediate social tariff consultation (treating Warm Home Discount as proxy, deferring via Fuel Poverty Strategy review); Cold Weather Payment reform (maintaining seven-day threshold); windfall profit redirection to debt relief (citing Ofgem's independence). It partially accepts: Warm Home Discount expansion (approved but value unchanged at £150); standing charge reform (consulting on moving WHD costs); Energy Ombudsman strengthening (proposing statutory designation and implementation powers but resisting four-week escalation period).

Tone

Procedural

Topics

energy-costsfuel-povertyconsumer-protectionpublic-financesmart-meters

Key actors

Department for Energy Security and Net Zero (DESNZ), Ofgem, Energy UK, Department for Work and Pensions (DWP), Department for Science, Innovation and Technology (DSIT), National Data Library (NDL), Energy Security and Net Zero Committee, Great British Energy

Notable line

“… the Government believes that our mission to deliver clean power by 2030 is the best way to break our dependence on global fossil fuel markets and protect billpayers permanently.”

Key Quotes

“More effective data sharing between key stakeholders will be essential in making all government support schemes fairer, better targeted and cost effective.”
— Energy Security and Net Zero Committee · On importance of data sharing to targeting support schemes

“The value of the Warm Home Discount has increased by only £10 since 2011, while household energy bills have risen by more than £500.”
— Energy Security and Net Zero Committee · On inadequacy of Warm Home Discount rebate value

“The UK is experiencing a severe energy debt crisis that shows little sign of abating. Millions of customers currently owe more than £4bn in debt and arrears, a record figure that has more than tripled in just five years.”
— Energy Security and Net Zero Committee · On scale of energy consumer debt problem

“It is completely inexcusable that while households are forced to ration energy and choose between heating and eating …”
— Energy Security and Net Zero Committee · On energy network company profits during cost crisis

“Thanks to decisions in this Budget, we will deliver an average £150 of costs off household energy bills from April 2026. As a result of this action, people can expect to make a significant saving on their bills.”
— Government · On Autumn Budget bill reduction measures

“Ofgem currently implements the RIIO (Revenue = Incentives + Innovation + Outputs) framework. Ofgem outline that RIIO price controls encourage energy network companies to support Great Britain's move to low-carbon energy.”
— Government · On regulatory framework for network company profitability

“… the Government is taking back control of our energy to prevent the British people from being left exposed to price shocks caused by our dependence on fossil fuel markets.”
— Government · On long-term energy strategy rationale

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Source · parliament.uk record ↗