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Landlords must pass on new £400 energy rebate to tenants

by: Emma Lunn
  • 21/09/2022
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Landlords must pass on new £400 energy rebate to tenants
New legislation means that landlords will be forced to hand over the £400 energy bill discount to tenants paying for all-inclusive bills under a package of energy support measures being introduced by the government.

Ministers have announced further details on the Energy Bills Support Scheme (EBSS), alongside an energy support scheme for businesses.

Under changes to the EBSS, tenants paying for bills as part of their rent, households who pay for district or communal heating, plus those who live in park homes, will all get the £400 energy rebate. Households which use alternative fuels such as heating oil, instead of gas, will get £100.

These groups were either left out of the previous support scheme, or the situation wasn’t clear.

Landlords must pass on discounts

Legislation will be introduced to make sure that landlords pass the £400 energy bill discount on to tenants who pay all-inclusive bills. According to Citizens Advice, nearly 585,000 renters pay their rent inclusive of bills.

There had been fears that landlords would not pass the savings on to all-inclusive tenants.

However, Chris Norris, Policy Director for the National Residential Landlords Association, said: “Given payments under the support scheme have not begun to be made, the Government’s plans to legislate are premature and are demonising landlords unnecessarily.  It sends a dangerous and misleading message that landlords cannot be trusted to do the right thing, creating needless fear and anxiety for tenants.

“The reality is that one-off pots of money like this cannot compensate for the fact that the benefits system is systematically failing to protect the most vulnerable tenants. At a time when households finances are being squeezed it makes no sense to have frozen housing benefit rates.”


Help for businesses

The government has also announced a new Energy Bill Relief Scheme to slash bills and stop firms going bust this winter.

The scheme, which will cost the taxpayer £25bn, will effectively see energy costs for businesses slashed by up to half their expected price through the winter months.

The level of discount for each firm will depend on their contract type and circumstances but experts say the scheme represents a 45% discount to wholesale energy prices.

Like the energy price guarantee for households, the scheme effectively puts a maximum price on the unit price cost of electricity and gas charged to businesses, charities, schools and hospitals.

The scheme will apply to energy usage from 1 October 2022 to 31 March 2023, running for an initial six-month period for all non-domestic energy users. The savings will be first seen in October bills, which are typically received in November.

As with the energy price guarantee for households, customers don’t need to take action or apply to the scheme to access the support, as the discount will automatically be applied to bills.

To administer support, the government has set a ‘supported wholesale price’ for firms on fixed contracts – this is expected to be £211 per MWh for electricity and £75 per MWh for gas, less than half the wholesale prices anticipated this winter.

Businesses on other contracts, including variable rates, will come under a maximum discount band likely to be around £405/MWh for electricity and £115/MWh for gas.

Businesses not connected to either the gas or electricity grid, and use heating oil or alternative fuels instead, will receive equivalent support which will be announced shortly.

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