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Energy: Coronavirus

Question for Department for Business, Energy and Industrial Strategy

UIN 56124, tabled on 8 June 2020

To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate he has made of the level of debt that has accumulated in the energy sector since the covid-19 outbreak; and what plans he has to support (a) suppliers and (b) consumers in tackling that debt in the short term.

Answered on

16 June 2020

On 19 March the Government established an industry-wide voluntary agreement to a set of principles for assisting energy consumers, through difficulties caused by Covid-19. The support offered is based on the individual circumstances of the customer and the systems, processes and capability of the supply company, but includes measures such as extending discretionary or friendly credit, adjusting payments and the recovery of debts and sending out a pre-loaded top up card for traditional prepay customers who are unable to top up.

Government has also introduced wider schemes to assist both consumers and businesses during the Covid-19 outbreak, including schemes to provide affordable government backed loans. Government has supported household incomes through the Job Retention Scheme to enable employers to furlough staff and the Self Employment Income Support scheme. Government has also introduced a number of temporary changes to Universal Credit to better support consumers on low incomes through the outbreak, including significant increases to payments.

Government and Ofgem have supported energy suppliers in their ability to manage costs and support their customers by providing a loan to the Low Carbon Contracts Company (LCCC) to ease the additional pressures on supplier Contracts for Difference (CfD) payments and the ability for suppliers to defer part of the network charges, in order to free-up short term working capital and enable the support of customers in need.

It is too early to say what level of debt has accumulated since the Covid-19 outbreak. Government continues to regularly engage with Ofgem energy suppliers and consumer advocates to understand the evolving picture.