Stalling a social tariff ignores public will
Protecting vulnerable consumers from energy prices that remain way above 2021 levels is a popular and easy to implement policy that the next Government must prioritise.
Energy bills will go up again in October and years of staggering prices have taken their toll. Too many of our most vulnerable family, friends, relatives and neighbours are being left in fuel poverty.
Nearly 40% of people with a learning disability or their carers who responded to a Mencap survey said they had kept their heating off despite being cold. Over a quarter said they avoided switching lights on to save money.
More widely, customers are already £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in energy debt, in cold damp homes and many are experiencing a mental health crisis driven by high bills.
A social tariff is a discounted energy bill for people in greatest need, such as those people that have low incomes and are elderly, have young children or rely on energy for medical needs.
It would help target financial support at those who most rely on energy and prevent vulnerable households living in cold damp homes each winter.
New polling by Opinium for the Warm This Winter campaign has revealed that 57% of the public back the introduction of such a tariff. Just 11% of the public opposed the proposals.
And it is not just the public who back the idea. During the last Parliament, the cross-party House of Commons Energy Security and Net Zero Committee of MPs recommended that this be introduced along with other reforms to help vulnerable households stay warm each winter.
On 12 July 2023, the Deputy Prime Minister reminded the House of Commons that the Government was “exploring the best approach to consumer protection… as part of wider retail market reforms.”
This built on a history of positive statements from Ministers on a social tariff with charities then spending significant resources to develop options for implementation.
These included simple solutions, such as the extension of existing programmes or the reintroduction of an Energy Price Guarantee with a lower set of unit rates for those in most need.
But MPs were also sent more ambitious proposals, such as a free band of “energy for all” or the concept of a rising block tariff where those who consume energy for luxury use pay a premium, which is then used to subsidise energy for those in fuel poverty.
Sadly the last Government suddenly went cold on the idea, the consultation was shelved and campaigners were left to wonder why.
More than 41,000 members of the public signed a 38 Degrees petition, demanding a social energy tariff for vulnerable people and the new Opinium research shows that this support still cuts across the political divide.
Some 68% of 2019 Labour voters, 60% of 2019 Lib Dems and 54% of 2019 Conservative voters support a social tariff.
Of course, the big question is how to pay for the policy?
A quarter of voters surveyed by the Opinium team believed that it should be fully funded through the energy industry (producers, networks and suppliers). A similar number backed a mix of Government funding and energy industry contributions.
There was less support for other proposals, such as contributions via energy bills or paying solely for the policy through general taxation.
It is estimated that the energy industry has generated more than £427bn in profits since the start of the energy bills crisis, up £7bn since the last update in April 2024. So it is no wonder that the public would support this being paid for by the whole energy industry.
Producers, transmission firms, network operators, market traders, suppliers and their supply chains could all chip in through their profits to make this happen.
Of course, this is just part of the solution to Britain’s broken energy system.
We need the next Government to act quickly after the election to end energy debt, protect households from the volatile global energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.
A social tariff can play its part in ending fuel poverty, all that’s needed is the political will to see it through.
Simon Francis is the coordinator of the End Fuel Poverty Coalition.
