Martin Lewis grills Energy Secretary over lack of action on standing charges and missing support for vulnerable households this winter
Energy Secretary Grant Shapps has been questioned by MoneySavingExpert.com founder Martin Lewis about his lack of action to bring down standing charges and why he's yet to introduce an energy social tariff. On ITV's Good Morning Britain (on 19 July), Martin also grilled the minister on whether more support would be offered to vulnerable people this coming winter.
We've put the clip and the transcript below. For help on how to cope with the cost of your energy bills, see our What to do if you're struggling with energy bills guide.
ITV's Good Morning Britain – Wednesday 19 July 2023
From ITV's Good Morning Britain on Wednesday 19 July 2023, courtesy of ITV. All rights reserved.
Transcript of what Martin said on the show…
Here's a direct transcript of what Martin said, though we've split it into sections for ease.
Martin asks what the Government will do to help vulnerable people this winter
Martin Lewis: "Let's talk energy prices because we're talking inflation. And one thing inflation doesn't count is the fact that there will no longer be the £400 winter energy support.
"Now, the price cap's come down by 17%, it's not expected to drop much more for the end of the year. There are still no plans in place for this winter, which means most people who are lower to mid users, which includes many of the poorest and most vulnerable in the country, will actually in total, once you factor in that £400, pay more this winter than last winter. And last winter was double the winter before. What are you going to do to help those people?"
Grant Shapps: "So, I mean, you absolutely, you and I discussed this before. As you as you know, we paid about £1,500 of the average energy bill last winter. It won't have felt that way because bills were going up so much. Fortunately, we have now seen the bills and the wholesale price come down and that starts to be reflected in a drop of about £426 in the average household energy bill at the beginning of the month.
"Now, you're right to say we're not doing all the support, Governments don't usually – in ordinary times, without Putin invading Ukraine – don't usually pay towards energy bills, and we have now withdrawn from doing that. We'll be keeping a very close eye on things, but as you'll know, the price per therm and the price per kilowatt on the wholesale market has been falling quite dramatically. So we'll keep a close eye on that."
Martin: "If I may be honest, most members of the public don't give a monkey's about the wholesale market. They care about what they'll pay, and as noted, most lower to middle users will pay more the winter coming than they did last winter, which was horrendous. Will there be any support this winter for those people?"
Mr Shapps: "So, we do have the Warm Home Discount and there is support through other mechanisms, including Universal Credit. But you're right, most people don't care, as you say, about the price per therm or whatever. What they do care [about] is at the beginning of this month, they saw their bills annually drop by £426, about 17%. That's very important.
"But you're asking me whether we intend to continue to intervene in the energy market by paying out. Remember that money is not free – we have to tax it to pay it out. So, no, the answer is we're not planning to do that, although we're keeping a very, very close eye on those wholesale markets."
The minister was also grilled on why standing charges haven't come down
Martin: "Secretary of state, on my show in March, I asked you about standing charges. The biggest cause of complaint that I get by a mile [is that people are] paying £300 a year just for the facility of having gas and electricity, and that has not come down in the latest announcement.
"People are furious about it. You said you would talk to Ofgem about it and sort it. It's four months later. What have you done? What are you doing about standing charges?"
Mr Shapps: "I did exactly what I said I'd do. I spoke to Ofgem, and actually the boss of Ofgem came out in, we spoke in March, we came out in May and said that they are going to be having a look at this with the energy companies.
"Now remember, and I just want to put this on record, what that standing charge is there to pay for are all of the network costs, the maintenance costs and the things which happen before you get the live supply of energy to the household, so it's not for nothing.
"But like you, and as I said to you in March, I was concerned about the balance of these costs because I spotted on my energy bill, for example, at the beginning of this month, that whilst I was having a welcome drop in the cost of my energy, they were tweaking up the standing order itself. So, that work is ongoing."
Martin: "To be fair, that's because Ofgem choose to put that cost there rather than on the unit rate."
And Martin questioned whether plans to consider a social tariff have been shelved
Martin: "Final question. You announced that you would be looking at bringing in a social tariff for the most vulnerable customers. That was meant to be announced in the Autumn Statement. I haven't received the consultation document yet, which means there's not a chance in hell it will be in the Autumn Statement.
"No one's heard what's going on. None of the charities know what's going on. Are you going to do a consultation on the social tariff or has that been put on the back burner?"
Mr Shapps: "So, we already have the Warm Home Discount and we'll look at how we use..."
Martin: "That's not a social tariff."
Mr Shapps: "Well, it provides the same thing..."
Martin: "It doesn't."
Mr Shapps: "What it's about is giving people money who will be in, you know, fuel difficult situations and fuel poverty. That's what the Warm Home Discount does."
Martin: "But are you going to do the consultation on the social tariff that you promised would be policy for the Autumn Statement, which means that vulnerable people will get special cheaper tariffs? Or is that gone, because why haven't we got a consultation document on it?"
Mr Shapps: "A little bit of patience, we're working on all of these things, and the Chancellor, of course, will set out the plans in the Autumn Statement itself."
Martin: "Not without a consultation, it wouldn't be legal because you haven't done a consultation, so you can't set out the plans in the Autumn Statement. Are you going to do a consultation first?"
Mr Shapps: "Consultations, with respect, can be anything from two weeks to three months, so you will need to be a bit patient on this. But what we are doing is making sure that we provide protection as we do through the Warm Home Discount, and we will of course be saying more about that come the autumn.
"But I do just want to point out, none of this money is free. We have to tax it if we're going to raise it, and we don't want to be long-term in the business of paying out for energy bills, as we had to do in a massive way, probably £40 billion this last year, because it just pushes up people's taxes. What we want to do is get to cheap energy, which is one of the reasons I launched Great British Nuclear yesterday, as I mentioned."
Martin's co-host Susanna Reid: "And you have made that point. Alright, OK. Grant Shapps, thank you very much."
Martin: "Thank you for joining us."