Where is the £600?

If you’re reading this, you will be painfully aware that we’re still waiting on the £400/£500 £600 all-household support pledged by the UK government aka the Energy Bills Support Scheme. Winter is already here in NI. We’ve understandably lost all patience and much hope. How did we get here, where is it & how will it help when it comes?

Our story starts on February 3rd of this year. First Minister, Paul Givan of the DUP, resigned from the Executive. That afternoon, DUP MP Ian Paisley Jr spoke in the House of Commons highlighting the imminent collapse of the NI Executive and petitioning the UK government to administer governance in NI in the absence of a functioning Executive. Jacob Rees-Mogg responded.

“I can assure the hon. Gentleman that the British Government take responsibility for the whole of the United Kingdom. It is one single and undivided United Kingdom, and Her Majesty’s Government have a responsibility for the best interests of the whole of our country. We recognise the serious difficulties that are being caused by the Northern Ireland protocol and its implementation, and the effect that it has had on Northern Ireland. Her Majesty’s Government are aware of the issues, but we are a Unionist Government who attach great importance to being part of the United Kingdom.”

It was in this context that the Chancellor, Rishi Sunak, arrived at the dispatch box to announce the measures the Government had decided on to address the impact of the cost of living crisis. A one-off repayable discount of £200 off energy bills was the measure of note announced for England with Barnett Consequentials confirmed for devolved nations including Northern Ireland. The Chancellor said,

“Energy policy is devolved in Northern Ireland, with a different regulator, and the Government do not have the legal powers to intervene, but we will make sure that the Executive are funded to do something similar, with about £150 million for Northern Ireland through the Barnett formula next year.”

The question of how the Government would ensure that support was delivered in NI in the absence of a functioning Executive was neither posed nor answered by anyone in the House of Commons at that time in that specific context.

On May 26th 2022, Rishi Sunak once again headed to the House of Commons to provide an economic update with another raft of interventions aimed to support households during the cost of living crisis. He announced the £200 discount would be repackaged as the Energy Bills Support Scheme – a one-off £400 non-repayable discount via energy bills. He said they would “legislate to deliver this support on the same terms in every part of the United Kingdom, including Northern Ireland.”

Ian Paisley Jr, DUP MP for North Antrim, commented – “This is a significant intervention in the economy – there is absolutely no doubt about that – and the Chancellor has said it is for the whole of the UK, which is one of the reasons why we celebrate being Unionists.” He also asked the Chancellor to confirm that the measures applied to Northern Ireland “without exception”.

Rishi Sunak responded –

“As for the support for energy bills in the autumn, we are open to exploring how best to deliver that support to those in Northern Ireland. Ordinarily it would be Barnetted—it is worth £165 million—because, as the hon. Gentleman will know, the energy market is separate to that in the rest of Great Britain, but if there is a way for us to deliver that support directly, we are open to doing so. We just need to see whether there is a mechanism to do so.”

When word of the measures reached Northern Ireland, Finance Minister Conor Murphy immediately suggested that the lack of a functioning Stormont Executive would make it difficult to facilitate delivery of the scheme in NI. He said there was “no guarantee” that the discount scheme would be delivered here and that the UK Treasury were well aware of the difficulties involved due to the semi-collapse of the Executive. It is therefore well documented that the UK Government were acutely aware that there were going to be significant issues with the roll out of the scheme on this side of the Irish Sea.

The widely publicised division within the Conservative party that preceded Prime Minister Boris Johnson’s resignation meant that the lack of functioning devolved government in Northern Ireland was largely put on the back burner by the UK Government.

Fast forward to 10th August 2022, then Chancellor Nadhim Zahawi visited Northern Ireland to meet with the Utility Regulator and Executive Ministers on the issue of the £400. He stated categorically that an Executive wasn’t required to deliver the support and went further by saying – “I give my pledge to the people of Northern Ireland that I will do everything in my power to deliver. Today’s meeting is very much about operational delivery… how do we get that money into people’s pockets as quickly as possible.”

The Chancellor met with the group again on 15th August with the UK Government announcing it as a joint taskforce approach which is indicative of how difficult the job of delivering the scheme was being made by the lack of a functioning Executive. The taskforce met again on 26th August and the conflicting information publicised by Minister for Economy Gordon Lyons compared with information from Minister for Finance Conor Murphy was startling.

Post the latter meeting, Economy Minister Gordon Lyons broadcasted his belief that the scheme would be delivered in November as a one-off lump sum. Finance Minister Conor Murphy drew a very different impression from the meeting. “The idea that we have a date in November was not mentioned in the meeting…” Nonetheless, November was also confirmed as the month of delivery by Liz Truss Prime Minister a few weeks thereafter in late September.

The last week of October, many people in NI were waiting patiently for two things being introduced. The Energy Price Guarantee to see electricity and gas prices lowered by supplier due to an injection of cash from the UK Government and delivery of the £400 to all households with the then additional £100 for oil customers. As we know, it still has not been delivered nor has there been a confirmed date for delivery. And as we now are aware, the scheme has been adapted to give every household £600 in the absence of a mechanism to deliver additional support to homes relying on home heating oil.

In the very month of November itself, we have seen the Secretary of State Chris Heaton-Harris attempting to use the issue, and the people it affects, as leverage over the DUP with regards their boycott of Stormont. He said “It’d be much easier for me to do that with a functioning executive that was working,” Not only is that statement factually inaccurate, i.e. he wouldn’t have needed to do it at all had we had a functioning Executive, but it also is ridiculous considering it had been said by the then Chancellor Nadhim Zahawi in August that an Executive was not required to deliver the scheme. So which is it?

The scheme itself, originally devised to apply in England, has much better outcomes for ‘dual fuel’ credit customers i.e. households that receive electricity and gas from the same supplier. It does not, however, have the same outcome for households with separate suppliers for gas & electricity, households that use other forms of heating e.g. home heating oil, or households that have traditional prepay meters for gas and electricity i.e. the majority of households in NI. It is particularly ineffective for households on low incomes who do not have access to large amounts of disposable income, credit or savings.

Conflating energy with heat comes with its own problems. In terms of the delivery of the scheme in NI, the focus has always been on electricity as a delivery mechanism rather than heat due to the significantly differing energy sector here. Given that heat is much more important to ensuring and promoting health, particularly in winter, than light or power, the aims of the scheme could never be met by the roll out mechanisms. That is why the amount was originally to be sent as a Barnett Consequential rather than the scheme being replicated directly. And that is why we, and many others, have been intensely critical of the DUP for collapsing devolved governance.

According to Ofgem, an average household uses 242 kwh of electricity a month compared with 1000kwh of gas. The difference in cost? Based on the average usage and cheapest prepay suppliers in the Derry area that indicates a spent of £41 per month on electric compared with £136 per month on gas. And when it comes to oil heating, the biggest challenge is that most suppliers will only deliver a minimum of 300 litres which currently costs £265. We can therefore begin to understand why £600 applied to an electric prepay meter or a bill does not free us up to spend that same amount on heat at the same time.

Even in light of the very obvious problems with the scheme and considering how much time has passed since the UK Government accepted the task of administering it on our behalf, there have been no further attempts to tailor the scheme to be more reflective of the NI energy market. And as of today, 24th November, with Christmas hurtling down the track, we still have no date for delivery. There is a palpable sense of despair and despondency amongst ordinary people right now. We need action not words.