Government urged to introduce ’emergency energy tariff’

The chancellor is being urged to introduce an “emergency energy tariff” in the upcoming Autumn Statement in order to support the most vulnerable energy customers this winter.

A number of organisations have penned a letter to Jeremy Hunt urging him to introduce targeted help to millions of households they deem are in the most need, such as those with occupants who have medical conditions and are reliant on energy.

The letter, written by the Warm This Winter Campaign, says: “We support the calls from the Money Advice Trust and others for a Help To Repay scheme. But that will only help deal with historical debt, it will not prevent future debt. Nor will it help keep people warm this winter.

“That’s why we are now calling on you to provide funding in the Autumn Statement to deliver an emergency energy tariff – a specific, targeted, time limited and practically possible intervention.

“The tariff could be set at the same level as the Ofgem price cap as at 1 October 2020. It could be made available to selected, most in need, groups through the existing Energy Price Guarantee mechanism which means that it can be delivered this winter.”

Under these proposals, it adds, the average household on the emergency tariff would see their monthly energy bills reduced by approximately £87 from current levels – a saving of around 46%.

Recipients of such a tariff would include those who:

• Have medical needs which mean they rely on energy – which are identifiable via the Priority Service Register (c.1 million households)
• Have dangerously low (or no) gas usage, but have a gas meter and supply (c.1 million households).
• Are eligible for the Warm Home Discount (c.3 million households)
• Are on a prepayment meter (c.4.5 million households)

If all the suggested groups were included in the emergency tariff, the letter states, it would cost approximately £695 million a month. Between December and when the Energy Price Guarantee lapses next April, this would cost £2.8 billion.

Yet these costs, it is suggested, could be alleviated by energy firms which have their own schemes to help customers. Government should therefore discuss with the industry how the tariff interacts with these support programmes.

Simon Francis, coordinator of the End Fuel Poverty Coalition, which is part of the campaign to introduce the tariff, said: “The reality of this winter is that, without support, we will be a nation sheltering in warm spaces, cowering in one room of our homes or wrapped up inside like the Michelin man. This should not be acceptable in a modern society.

“Failure by the government to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes.

“The proposed emergency energy tariff is a specific, targeted, time limited and practically possible intervention which the chancellor can make to send direct help to households who are most at risk of living in cold damp homes.

“The government should meet with charities and industry to finalise the details of the proposal. It can then use the opportunity of the Autumn Statement to send a clear message to the public that ministers understand their suffering and are prepared to help them stay warm this winter.”

A Department for Energy Security and Net Zero spokesperson said: “We recognise people are concerned about cost-of-living challenges and will continue to support vulnerable households with their energy bills.

“We spent nearly £40 billion to cover around half a typical household’s energy bill last winter and additional help is available for the most vulnerable this winter through an increase to the Warm Homes Discount, from which we expect over 3 million households to benefit.

“We continue to monitor the situation and will keep options under review, including with respect to the most vulnerable households.”

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.