Labour gives energy companies powers to snoop on people’s tax records

The Government is granting powers to energy companies to snoop on their customers’ incomes, tax records, and property valuations in a move described as “big brother overreach”. It could pave the way for surcharges on wealthier households to subsidise bills for others as part of future plans to tackle rising energy prices . Ministers have identified eight official databases that could be shared with energy firms to help them “target” future support at certain households.

These include HMRC income tax and child benefit records, property valuations, and benefits and pension records. The sweeping new powers are part of the energy independence bill, introduced to Parliament last week. The Government’s impact assessments reveal that future discounts on energy bills for those in financial need could be funded by an extra levy on the bill of wealthier customers. Andrew Bowie, the shadow energy secretary, accused the Government of waging “class warfare” on energy bills.

“Labour will always find a new way to make you pay more so it can hand out ever more in benefits ,” he said. “Working people did not vote for a big brother state that spies on them and sends them a bigger energy bill. “This energy bill raid is just the latest chapter, with families who work hard and do the right thing told to pay more so others can pay less. This is an outrageous abuse of government power.” Under current laws, energy companies can access fuel poverty data to assess where to target energy relief schemes.

However, under the new laws, they would have access to a far greater range of customers’ personal datasets. These would be shared by the Government on a case-by-case basis, depending on the design of future schemes. A government impact assessment, published by the Department for Energy Security and Net Zero for the “preferred option” of how a future scheme would be funded, states that “progressivity is a key principle for any targeted energy bills support scheme”.

Under the section that examines possible “significant or adverse distributional impacts”, it says: “The overall impact would be positively redistributive. Schemes would support those less able to pay, and the costs of the scheme would fall principally on those most able to pay.” The document says this would mean a “redistribution” from those who are not eligible for support but are funding the scheme, to those who are eligible for support.

This would “represent a transfer from primarily high-income households to low-income households”, it added. Simon Francis, the co-ordinator of the End Fuel Poverty Coalition, said Labour’s commitment to “implement a long-term plan to help households who are struggling with energy bills” through the energy independence bill was “very welcome”. The bill will provide the mechanism to create a “social tariff”, for which his group has campaigned for years.

However, he added: “It is disappointing that seeking funding for a social tariff through household bills is the first funding option on the table. Asking households to pay for support for other households should be the last resort, not the first.” Mr Francis said an energy relief scheme for the households most in need should be funded by the energy companies themselves. A Department for Energy Security and Net Zero spokesman said that criticism of the plans as “big brother overreach” was “misleading”.

The spokesman insisted that the bill did not change individuals’ privacy or data protection rights, adding: “The measure in the energy independence bill is supported by industry and will help us target future support to households who need it the most. This is one of the steps we’re taking to make bills fairer for households.” Officials said that the sharing of government data with energy companies was aimed at supporting the “design and effective delivery” of energy support packages in the future.

They said the measure “provides the Government with a wider range of options” when designing schemes for future energy crises.