The Office for National Statistics (ONS) classifications assessment of the Energy Bills Support Scheme (EBSS) has concluded that payments under the scheme should be classified as a current transfer paid by central government to the households sector.
As such, the transfers increase household income rather than reducing household expenditure. Therefore, in line with the ONS's previous decision on the classification of the Council Tax rebate, the payment will not affect either the Consumer Prices Index including owner occupiers' housing costs (CPIH), the Consumer Prices Index (CPI) or the Retail Prices Index (RPI).
Under the EBSS, domestic energy customers in Great Britain will receive a £400 discount on their bills, paid in six equal monthly instalments commencing in October 2022. The UK Government is also planning equivalent support for Northern Ireland energy customers, but these details are not yet available.
The ONS assessed the EBSS in the context of internationally-agreed statistical guidance as described in the United Nations System of National Accounts 2008 (PDF, 9.2MB), the European System of Accounts 2010 (PDF, 6.5MB) and the accompanying Manual on Government Deficit and Debt 2019, as these are the guides by which the UK compiles its National Accounts.
This assessment looked at several possible classifications in the light of the statistical guidance, and determined that the EBSS support package is classified as an 'other miscellaneous current transfer' from the central government subsector to the households sector. The other treatments considered but ruled out were: a subsidy to energy suppliers; a social benefit or social transfer to households; a capital transfer to households. Further details of the classification can be found in the Latest Update section of our Public Sector Classification Guide.
The implication for consumer price inflation of this EBSS classification decision is that the payment is not part of household expenditure and should therefore be treated as out of scope of the CPIH, CPI and RPI.
Decisions on whether to include rebates, subsidies and discounts in our consumer prices inflation statistics are taken on a case-by-case basis, aiming to be consistent with the National Accounts, the Public Sector Finances, and other economic statistics. Decisions are based on international statistical guidance and practical considerations. More information on this is provided in section 9.2 of our Consumer Price Indices Technical Manual.
If you require any further information on this classification assessment, please email email@example.com, or on its implications for inflation statistics firstname.lastname@example.org.