{"id":4310,"date":"2026-08-29T09:02:05","date_gmt":"2026-08-29T09:02:05","guid":{"rendered":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/08\/29\/politics-home-article-what-more-could-government-do-to-help-with-energy-bills\/"},"modified":"2026-08-29T09:02:05","modified_gmt":"2026-08-29T09:02:05","slug":"politics-home-article-what-more-could-government-do-to-help-with-energy-bills","status":"publish","type":"post","link":"https:\/\/smartinvestingschronicle.com\/index.php\/2026\/08\/29\/politics-home-article-what-more-could-government-do-to-help-with-energy-bills\/","title":{"rendered":"Politics Home Article | What More Could Government Do To Help With Energy Bills?"},"content":{"rendered":"
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The average household’s energy bill will rise to the highest level in three years following Ofgem’s new price cap announcement. (Alamy)<\/p>\n<\/p><\/div>\n

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\n \"Nadine <\/p><\/div>\n<\/p><\/div>\n


\n 4 min read<\/span>28 August<\/span>
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Ofgem\u00a0announced this week that the energy price cap would increase to the highest level in three years as the war in Iran continues to drive up energy prices in the UK.<\/p>\n<\/p><\/div>\n

The energy regulator said\u00a0the cap, which determines the maximum amount that a supplier can charge a consumer for energy per year,\u00a0would rise by 4 per cent from\u00a0\u00a31,663 to\u00a0\u00a31,723 between October and December. Energy analysts Cornwall Insights have also predicted that\u00a0the cap will reach around\u00a0\u00a31,872.15 in January-March.<\/p>\n

Energy Secretary Miatta Fahnbulleh said “families will be understandably concerned” about the cost of energy “which is being driven up by the Iran war”.\u00a0<\/p>\n

\u201cEnergy is an everyday essential, and it needs to be affordable for everyone, which is why we have cut VAT on electricity bills from October to give families some breathing space,” she said.<\/p>\n

\u201cThis has limited the rise in the price cap and follows the \u00a3150 in costs we removed from bills earlier this year, and we will keep looking at what more we can do to protect families from unaffordable bills.\u201d\u00a0<\/p>\n

Prime Minister Andy Burnham announced a cut to\u00a0VAT on household energy bills when he entered No 10 in July. The step, which was\u00a0part of a wider cost-of-living package,\u00a0was projected to remove around \u00a345 a year from the average household bill.\u00a0<\/p>\n

However, the savings face\u00a0being swallowed\u00a0by higher prices, raising questions of what more the Labour government can do\u00a0to support households with their bills.<\/p>\n

Why are energy bills increasing?\u00a0<\/strong><\/h4>\n

Energy prices had started to stabilise following their 2022 peak triggered by Russia’s invasion of Ukraine. Around half of Europe’s natural gas came from Russia, meaning a breakdown in relations with Moscow led to a sharp fall in supply and a steep rise in global prices.<\/p>\n

However, the decision by the US and Israel to attack Iran at the start of this year and resulting conflict has led to further disruption in the international energy markets.<\/p>\n

Around 20 per cent of the world’s natural gas passes through the Strait of Hormuz, a vital shipping lane controlled by Iran and which Tehran has effectively shut down as a way of putting pressure on the Donald Trump administration.\u00a0Iran is also responsible for a large portion of the world’s oil supply.<\/p>\n

Responding to the cap rise announcement on Wednesday, Dr Craig Lowrey, principal consultant at\u00a0Cornwall Insight, said: “What is frustrating is these rises, as we have seen time and again, have very little to do with what is happening in Britain.”<\/p>\n

What further action could the government take?<\/strong><\/h4>\n

The Budget on 28 October will be a\u00a0key event for\u00a0the question of further support.<\/p>\n

In terms of what steps Chancellor John Healey might\u00a0take in his first fiscal event since entering the Treasury, PoliticsHome understands he could\u00a0roll out plans developed by the Keir Starmer government to expand\u00a0eligibility for the Warm Homes Discount.<\/p>\n

The Warm Homes Discount was introduced in 2011 by the coalition government to help\u00a0low-income households with energy bills during the winter months through a one-off \u00a3150 annual discount.<\/p>\n

PoliticsHome understands that it could be expanded to include more households facing cost-of-living pressures, such as recipients of\u00a0Personal Independent Payments, and described as ‘Warm Homes Plus’.<\/p>\n

The End Fuel Poverty coalition told\u00a0PoliticsHome\u00a0that while an expansion of the Warm Homes Discount would be welcome, the \u00a3150 discount is now\u00a0worth significantly less than\u00a0when it was introduced over\u00a0a decade ago due to energy bill inflation.\u00a0It is now estimated to cover 9 per cent of the average bill, compared with 14 per cent when it was first rolled out.<\/p>\n

PoliticsHome\u00a0also understands the government has shown\u00a0interest in a Resolution Foundation idea to use\u00a0HMRC data to target support at households earning below a certain threshold. The think tank has said\u00a0that the scheme would provide an additional \u00a3175 to eligible households on average a year, costing the government \u00a32bn.<\/p>\n

Adam Berman, director of policy and advocacy at Energy UK, told PoliticsHome\u00a0that “too many households continue to struggle with high energy bills” in the UK.<\/p>\n

He added:\u00a0“It\u2019s imperative that the government introduces more targeted support for low-income households alongside bringing down electricity bills for everyone.”<\/p>\n

With the first Budget of the Burnham government two months away, and the next price cap period not until early next year,\u00a0further action on energy bills is not expected\u00a0until after 28 October, when households will be preparing for the coldest period of the year.<\/p>\n

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The average household’s energy bill will rise to the highest level in three years following Ofgem’s new price cap announcement. (Alamy) 4 min read28 August Ofgem\u00a0announced this week that the energy price cap would increase to the highest level in three years as the war in Iran continues to drive up […]<\/p>\n","protected":false},"author":1,"featured_media":4311,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-4310","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech-news"],"_links":{"self":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4310","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/comments?post=4310"}],"version-history":[{"count":0,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/posts\/4310\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media\/4311"}],"wp:attachment":[{"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/media?parent=4310"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/categories?post=4310"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/smartinvestingschronicle.com\/index.php\/wp-json\/wp\/v2\/tags?post=4310"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}