Ministers have ‘lost appetite’ for social tariff

There is increasing concern within the energy sector that the government will abandon plans for a social energy tariff, with ministers believed to have blocked publication of a consultation on the subject.

There are now fears the government will only go as far as expanding the Warm Home Discount despite mounting calls – including through Utility Week‘s Action on Bills campaign – for substantial targeted support.

One source close with talks between government and industry told Utility Week they believe ministers have made a “political decision” not to proceed with the plans first mooted in last November’s Autumn Statement.

“It’s not like they haven’t had enough time to get this done and they’ve timed out, it’s as if they’ve decided not to do it and I think that’s pretty worrying,” they said.

Another insider said they believed “people are worried that they (the government) have lost appetite” for a social tariff.

They said that officials from both the Department for Energy Security and Net Zero and Treasury indicated they had not had a great deal of feedback from their respective ministerial teams on social tariff proposals and were therefore “to some extent, working relatively in the dark”.

“(This) may suggest ministerial disinterest as being an issue, or it may suggest that officials, because they’ve worked up proposals in the dark, have misjudged ministerial appetite for what they should look like,” they said.

As part of our Action on Bills campaign, Utility Week has been urging government to publish detailed plans on what a social tariff in energy would look like – as well as committing to interim measures for this winter.

Matt Copeland, head of policy and public affairs at charity National Energy Action, said it was concerning Parliament had risen for summer recess before a consultation on a social tariff could be published – a key demand of our campaign.

Copeland further raised concerns that the “rhetoric” around a social tariff has “cooled off significantly”, with a government policy paper recently suggesting changes to the Warm Home Discount rather than a new social tariff as a way of delivering consumer protection.

He said: “The government did release a few documents that related to the retail market. They said that in the context of the new consumer protections they would be looking at what they can do with the Warm Home Discount to make that more flexible but they don’t mention anywhere any work around a social tariff.

“So I would say that the rhetoric around the social tariff has maybe cooled off significantly since that Autumn Statement from the Treasury last year that was quite categorical that they were considering a social tariff as one of the main options.”

Philippe Commaret, managing director of customers at EDF Energy, a longtime advocate of a social tariff also urged the government to “reprioritise” introducing such a tariff.

Asked how feasible a social tariff is by April 2024 considering no consultation on the matter has been issued before parliamentary recess, Commaret told Utility Week: “It is feasible with the right will, but will take determination and focus.

“We urge government to publish 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.”

He added: “Nobody knows how the market is going to evolve and while prices have fallen in recent months, bills are still expected to remain double their pre-pandemic levels. We are also seeing more customers in debt. 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.”

The Department for Energy Security and Net Zero did not respond to Utility Week‘s request for comment.