Landlords will be forced to pass on £400 cost-of-living support payments to tenants

·4-min read
File photo dated 03/02/22 of an online energy bill. Business Secretary Jacob Rees-Mogg is to set out details of a major Government support package for businesses - running to tens of billions of pounds - to ease the pain of soaring energy bills through the winter. Issue date: Wednesday September 21, 2022.
Landlords who pay their tenants' bills will need to pass down the cost-of-living payment of £400. (PA)

Renters whose landlords pay for their energy bills will still benefit from a £400 discount being brought in by the government.

Earlier this year, the then chancellor Rishi Sunak announced that households would receive the payment in the autumn to help them cope with the cost-of-living crisis.

At the time, housing and homelessness charities expressed fears that people with bills included in their rent agreements would end up missing out on the support.

Shelter chief executive Polly Neate warned many tenants would be 'at the mercy of their landlord' as there was "no specific legal obligations" for discounts to be passed on to renters.

But details on the government's Energy Bills Support Scheme (EBSS) released on Wednesday said new legislation will force landlords to pass on relief payments to tenants who pay all-inclusive bills.

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EMBARGOED TO 0001 WEDNESDAY SEPTEMBER 21 File photo dated 25/08/22 of a thermostatic radiator valve. Retrofitting England's homes with good insulation and a heat pump could create millions of jobs and knock hundreds of pounds off the average household's bills, new analysis suggests. Issue date: Wednesday September 21, 2022.
An energy price cap that means the typical UK household will pay no more than £2,500 a year for energy for the next two years from 1 October. (PA)

Additional funding will be made available so that the £400 payments will be extended to include people who live in park homes - mobile homes located on protected sites.

The latest guidance adds: "The government will also provide an additional payment of £100 to households across the UK who are not able to receive support for their heating costs through the Energy Price Guarantee.

"This might be because they live in an area of the UK that is not served by the gas grid and is to compensate for the rising costs of alternative fuels such as heating oil."

During her first week as prime minister, Liz Truss announced a energy price cap that means the typical UK household will pay no more than £2,500 a year for energy for the next two years from 1 October.

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Market prices have soared this year as wholesale energy costs soared to record levels. (Getty Images)

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Without the government introducing a limit, the average household energy bill would have jumped 80% from that date, from the current £1,971 to £3,549 a year under Ofgem’s latest price cap.

Individual household's energy bills could still exceed £2,000 depending on the amount they consume.

The government is also rolling out a separate Energy Bill Relief Scheme for businesses, and public and voluntary sector organisations, who aren't subject to the same energy price cap as households.

It provides a discount for all non-domestic customers, with the government setting a supported wholesale price - expected to be £211 per MWh for electricity and £75 per MWh for gas.

This is almost half the wholesale prices anticipated for this winter. The scheme will apply to fixed contracts agreed on or after April 1 this year, as well as to deemed, variable and flexible tariffs and contracts.

It will apply to energy usage from 1 October to 31 March, with the first savings to be seen in October bills, which are typically received in November.

Business secretary Jacob Rees-Mogg has said the non-domestic support package is likely to cost "tens of billions" but that it is needed to keep businesses going.

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Economist Paul Johnson told the Today programme: “I think something like this was inevitable. Some businesses were seeing their energy bills going up by five times – or certainly that was likely to happen from October.

“One of the positive things about the business announcement is that they appear to be looking at reviewing this and coming back with something more targeted in six months’ time.

“I rather wish they had done the same for households because for households and for businesses this is something of almost a panic reaction.

“You have got to do something and the only thing that they can do immediately is protect everybody, whereas in the medium term if this goes on we really want something that is more targeted.”