Energy suppliers cannot support vulnerable on their own

Energy retailers have pledged to step up support for vulnerable customers in the absence of government measures. 

However, a number of retailers have urged the government to act on supporting vulnerable consumers this winter, stressing that individual suppliers cannot do it on their own.

While energy prices have significantly dropped since the peaks seen last winter, there is mounting concern that the government is yet to consult on targeted support for the vulnerable, such as the introduction of a social energy tariff.

Eon chief executive Chris Norbury recently said his company was already implementing financial aid for its vulnerable customers in lieu of further government support.

At a recent hearing of the energy security and net zero select committee, he said: “What we will be doing this winter is for very low-income families we will be offering a rebate on the energy bill, for low-income families who have medical care at home we will be offering a rebate on the energy bill, the rebate for those is 25%.

“Where customers already have energy debt with us and who fit into those categories we will be bringing their account back to zero and we will be offering a 50% rebate on the energy bill, that is for the six months of this winter. That is what we can do for our customers.”

Norbury added: “We will be implementing something that goes towards a social tariff, yes, but we are limited in what we can do on our own. It would be far better and far more beneficial for people across society if that intervention was made by government.”

Following his comments a number of industry executives, including the sector’s trade body, have urged the government to intervene, sharing their fears that individual suppliers cannot tackle the issue on their own.

Commenting in response to Norbury’s concerns Energy UK’s deputy chief executive Dhara Vyas told Utility Week: “Suppliers continue to provide significant support to their customers who are struggling with high energy bills. However, this winter will be difficult for many households as prices are still extremely challenging for many, and the scale of the affordability challenge is far beyond the means of energy suppliers to solve.

“The government stepped up last year with vital support that was a lifeline for many customers. We are calling on government to urgently commit to delivering targeted support this winter.

“But higher prices are likely here to stay, and it is critical government also delivers on its promise to consult on an enduring mechanism for targeted bill support for households who need it in the longer term.”

Norbury’s fellow panellists included Philippe Commaret, managing director for customers at EDF Energy, as well as Simon Oscroft, co-founder of So Energy.

Speaking to Utility Week after the hearing, Commaret said: “Bills this winter will be double their pre-pandemic levels.

“We need a long-term policy for the vulnerable that is progressive and proportionate to consumption and would urge government to reprioritise this important policy, publishing a consultation as soon as possible after recess.

“It is important to protect those most in need against the extremes of the global energy markets, providing affordable access to energy. We will be stepping up what support we offer, and the vulnerable need government to act in parallel.”

Oscroft meanwhile said: “Suppliers alone can’t solve the affordability crisis. We had a BEIS committee early last year which came out with the recommendation that the government needs to push ahead with plans for a social tariff in consultations.

“We’ve had more discussion than ever before around the beginning of the year around social tariffs but over the last few months it seems like the government has completely rowed back on any intentions of delivering a social tariff.”

Good Energy is another retailer which has been urging the government to seriously consider a social tariff.

Its chief executive Nigel Pocklington said: “Energy suppliers moved quickly to deliver several support schemes last winter but these were just short-term solutions. We need to reduce people’s stress and anxiety by looking at longer-term strategies too, so that the most vulnerable households are better protected if price volatility returns to wholesale markets.

“However, it’s incumbent on the government to lead on this. Ministers should work with the industry on developing a targeted and means-tested approach which would provide welcome relief to those who need it most.”

Responding to the pleas from industry, a Department for Energy Security and Net Zero spokesperson reiterated the fact government issued the Energy Bills Support Scheme last winter and that the Energy Price Guarantee will remain “as a safety net through to April 2024 – with additional help targeted at the most vulnerable”.

“The outlook for energy prices has improved significantly since the Autumn Statement, which is good news for households who have seen their energy bills come down. The government continues to monitor the situation and will keep options under review, including with respect to the most vulnerable households,” they added.

Providing vulnerable consumers with additional support this winter and beyond is a core element of Utility Week’s Action on Bills campaign.

The key asks of government are:

• A clear plan for targeted support on energy bills for vulnerable customers to be put out to consultation before the summer recess with a target of putting this into action by April 2024
• A revised Energy Bills Support Scheme to be brought in for next winter while a more targeted approach is being designed
• Defra to support social tariffs in the water sector through a clear funding commitment and a definitive stance on whether there should be a single social tariff

This topic will be explored in more detail at Utility Week’s Consumer Vulnerability and Debt conference in Birmingham this November. For more information and to book your place, click here.