Households could have their financial information shared with energy companies to decide who pays higher bills, under powers in the Government’s Energy Independence Bill.

Ministers want new laws so that HMRC income data can be shared with energy suppliers, helping firms decide which households receive cheaper bills and which should pay more. The plans are part of the Bill, which was introduced to Parliament on 4 November by Energy Secretary Miatta Fahnbulleh and has not yet been passed.

Government impact assessments published alongside the Bill list eight sets of official data that could be shared: HMRC income and Child Benefit records, Department for Work and Pensions means-tested benefits including Pension Credit, DWP disability and carer benefits, DWP pensions, energy performance certificates, Valuation Office property data, and installation data. The number of occupants in a household and disability needs could also be shared.

Why ministers want the data

The stated aim is to target future support at the households that need it most. Using income data means help could reach poorer households who usually slip through the net because they are not on benefits. More than 40% of households in fuel poverty do not claim benefits, according to the Department for Energy Security and Net Zero.

Around half of the poorest households are expected to miss out on the Warm Home Discount this winter, which takes £150 off the bills of around six million households on benefits.

The Bill would amend sections 36 and 37 of the Digital Economy Act 2017. At the moment, the law only allows the Government to share this kind of data with energy suppliers to help households in fuel poverty. The change would let the data be used for people outside that group too, including those facing high bills, hard-to-heat homes or extra energy needs because of a health condition.

Higher bills for wealthier households

The cost of any extra support could be shouldered by taxpayers or added to bills. The impact assessments say that if it is added to bills, it would fall “principally on those most able to pay”, and that households on higher incomes that do not need the help “are expected to face higher bills”. The documents add that better income data could identify “households in need and potentially households most able to fund the scheme”.

No new energy support scheme has been announced, and Government documents suggest none would be in place before winter 2028-29 at the earliest. Government departments would not be forced to hand data over, and nothing will be shared until a specific scheme has been set up through further legislation. A DESNZ spokesperson said the measure “is supported by industry and will help us target future support to households who need it the most – they do not impact or change individuals’ privacy or data protection rights”, calling it “one of the steps we’re taking to make bills fairer for households”.

Critics call it “outrageous”

Shadow energy secretary Andrew Bowie called the plans an “outrageous abuse of government power”. He said: “Labour’s answer to almost every problem is more state control, more snooping and another bill. They have no business rummaging through people’s private financial and family records to bankroll their latest energy gimmick.”

Consumer rights expert Martyn James said targeting support at struggling households “seems sensible rather than mass payments where the wealthy are treated the same as those struggling”, but added: “HMRC is not the means to do this, as anyone who has spent an hour or two on the phone trying to sort a tax bill out will know. Outdated systems, complicated records and countless errors mean HMRC is far from the right organisation to identify people struggling.”

The row comes as energy prices keep rising, with experts predicting the energy price cap could rise by around 29% in January, adding about £429 a year to the average dual-fuel bill. The same Bill would also end new North Sea oil and gas exploration licences and create a route to scrapping gas standing charges. The Sun reported the data-sharing plans, and London Daily has also covered the Government’s impact assessments.