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All-inclusive tenants to benefit from £400 energy rebate

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Written by: Emma Lunn
21/09/2022
Landlords will be forced to pass on the £400 energy bill discount to tenants paying for all-inclusive bills under a package of energy support measures being introduced by the government.

Ministers have announced further details on the Energy Bills Support Scheme (EBSS), alongside an energy support scheme for businesses.

Under changes to the EBSS, tenants paying for bills as part of their rent, households who pay for district or communal heating, plus those who live in park homes, will all get the £400 energy rebate. Households which use alternative fuels such as heating oil, instead of gas, will get £100.

These groups were either left out of the previous support scheme, or the situation wasn’t clear.

Landlords must pass on discounts

Legislation will be introduced to make sure that landlords pass the £400 energy bill discount on to tenants who pay all-inclusive bills. According to Citizens Advice, nearly 585,000 renters pay their rent inclusive of bills.

There had been fears that landlords would simply pocket the cash and not pass the savings on to all-inclusive tenants.

Gillian Cooper, head of energy policy for Citizens Advice, said: “We’re relieved to see the government bring in measures to make sure people don’t miss out on money they’re entitled to. But it’s still shaping up to be an incredibly difficult winter and the government must be ready to provide more support for families struggling the most.

“Crucially, we also need a plan to get us out of this crisis. Investing in energy efficiency measures, like insulating people’s homes, will be key to cutting people’s bills down in future.”

Meanwhile, about 850,000 households live in mobile homes across the UK, and up until now it’s not been clear what help they would get with energy bills as prices soar. But the government has now confirmed they will also get the £400.

Households living in properties with district or communal heating don’t benefit from Ofgem’s energy price cap or the government’s energy price guarantee and, until today, the government has failed to clarify if these people will receive the discount. However, it’s now confirmed that new legislation will ensure these homes get the £400 rebate too.

Help for businesses

The government has also announced a new Energy Bill Relief Scheme to slash bills and stop firms going bust this winter.

The scheme, which will cost the taxpayer £25bn, will effectively see energy costs for businesses slashed by up to half their expected price through the winter months.

The level of discount for each firm will depend on their contract type and circumstances but experts say the scheme represents a 45% discount to wholesale energy prices.

Like the energy price guarantee for households, the scheme effectively puts a maximum price on the unit price cost of electricity and gas charged to businesses, charities, schools and hospitals.

The scheme will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the energy price guarantee for households, customers don’t need to take action or apply to the scheme to access the support, as the discount will automatically be applied to bills.

To administer support, the government has set a ‘supported wholesale price’ for firms on fixed contracts – this is expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter.

Businesses on other contracts, including variable rates, will come under a maximum discount band likely to be around £405/MWh for electricity and £115/MWh for gas.

Businesses not connected to either the gas or electricity grid, and use heating oil or alternative fuels instead, will receive equivalent support which will be announced shortly.

More help still needed

Business secretary Jacob Rees-Mogg said: “We have seen an unprecedented rise in energy prices following Putin’s illegal war in Ukraine, which has affected consumers up and down the country and businesses of all sizes.

“The help we are already putting in place will save families money off their bills, and the government’s plans for businesses, charities and public sector organisations will give them the equivalent level of support.”

The support package was generally welcomed by businesses – but many said that more help is needed.

Kate Nicholls, CEO of UK Hospitality, said: “The inclusiveness of the supports announced today – covering businesses small and large – will be extremely beneficial to the sector. A sector that provides a huge number of jobs, many of which are now more secure.

“Today’s announcement will give businesses some confidence to plan for immediate survival but we will not relent in our pursuit of a more comprehensive package to safeguard businesses and jobs. The levers of reduced VAT and business rates reliefs are still available to the government, and there must also be a comprehensive package to ensure that there is no cliff edge when these measures fall away.”

Dr Jackie Mulligan, founder of ShopAppy, said: “This announcement has come too late for many small businesses, and the length of time they may need to wait for payments to be backdated will exacerbate the already critical cashflow issues they are facing.

“While it’s good to finally have some support announced, small businesses, particularly those that line our high streets, need to be helped right now. There is no time for delay. Most businesses will also be asking, what happens after six months?”

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