23 Deferred

The UK government aims to reduce greenhouse gas emissions to achieve net zero emissions by...

Conclusion
The UK government aims to reduce greenhouse gas emissions to achieve net zero emissions by 2050.54 In April 2022, the Government set out its plans to reduce the UK’s vulnerability to international oil and gas prices, and accelerate the UK’s progress to net zero, by reducing the UK’s dependence on imported oil and gas and moving towards domestic sources of power, such as renewables.55 The Department told us that this shift was the longer-term underlying solution to challenges relating to energy security. Ofgem also told us that it wanted a retail market that could cope in a world where the country has more renewables and more energy storage, and where it was asking customers to buy and sell energy in different ways, such as flexing the times they use electricity to match times when demand is lowest.56 Overall Ofgem wanted to achieve: a fair price for energy for consumers; a resilient energy market; a low-cost transition to a net-zero; and an improvement in service standards for customers.57
Government Response Summary
The government agrees with the general aims and commits to work with consumer groups and industry to consider the best approach to consumer protection in the energy market from April 2024, as part of wider retail market reforms, and notes Ofgem's existing consumer interest framework.
Government Response
Deferred
HM Government Deferred
6.1 The government agrees with the Committee’s recommendation. Target implementation date: May 2023 6.2 As set out in the Chancellor’s Autumn Statement 2022, the government will work with consumer groups and industry to consider the best approach to consumer protection in the energy market from April 2024. 6.3 A key principle will be to ensure that consumer protection enables the energy market to deliver energy security and net zero at least cost, while ensuring a fair deal for consumers. 6.4 There are many potential models for consumer protection, including different forms of targeted discounts, which the government will consider. Government will undertake this work as part of wider retail market reforms focused on ensuring the energy market is resilient and investable over the long-term, and that it supports wider system transformation. 6.5 Ofgem has developed a consumer interest framework (CIF) as a basis for any future policy development. The CIF has four main objectives relating to fair prices, quality and standards, low-cost transition, and resilience. The framework is already embedded in Ofgem’s decision making processes and enables the regulator to identify key policy trade-offs and ensure policies are designed to meet the best interests of consumers. The framework is being consulted on as part of the Ofgem’s forward work plan and is currently undergoing user research to confirm that the CIF resonates with consumers and is fit for purpose.
Addressee Bodies
HM Treasury
Timeline
Recommendation age 3.7 yrs
Report published 13 Nov 2022