Social tariff consultation urgently needed

A coalition of more than 140 businesses, charities and consumer groups has written to prime minister Rishi Sunak calling for the long-awaited consultation on energy bill support to be brought forwards.

The letter – also sent to energy secretary Claire Countinho – warns that without a long-term targeted solution, the government will have no option but to continue with “costly sticking-plaster[s]”.

The chairs of the Energy Security and Net Zero Committee (Angus MacNeil) and Fuel Poverty and Energy Efficiency All-Party Parliamentary Group (Ben Lake) have also added their names to the letter.

A consultation on long-term bill support was pledged by the government in April 2022 and was confirmed again this April. It was slated to launch this summer, however has not yet come to fruition.

The coalition warns that it is now too late to put a long-term targeted solution – such as a social tariff – in place for this winter.

Instead it is calling for short-term solution for this winter. However, it also warns that there is “urgent” need for the promised consultation on a long-term solution.

“With winter fast approaching, short-term, targeted support is needed to protect the most vulnerable households in and on the edge of fuel poverty. These are people whose bills have become so unaffordable that they are having to make the desperate choice nobody should have to make – between heating and eating,” the letter states.

“But, as your government has itself acknowledged, we also need to work towards a longer-term solution. We are therefore calling on the government to publish the crucial consultation it committed to a year ago on future protection for energy consumers.”

It adds: “In the absence of the Energy Bills Support Scheme this winter, households will be facing bills 13% higher than the last, and energy costs are still substantially higher than they were before the crisis started. Forecasts show no sign of relief either – we can expect millions of people in low-income and vulnerable households to suffer many more years living in a cold home, rationing energy, and struggling to cook a hot meal. As families fall behind on bills, they will be faced with the double whammy of facing high costs and trying to drag their way out of energy debt.

“This is a long-term problem that requires a sustainable safety net for these people. Anything else will be a costly sticking-plaster. There’s now a significant risk that no new protections will be in place by the time they are desperately needed.”

Ben Lake MP, chair of the All-Party Parliamentary Group on Fuel Poverty & Energy Efficiency, said: “The government cannot delay the introduction of a social tariff any longer. With energy debt soaring by 70% over the last three years, it’s vital that low-income and vulnerable households are protected.

“A social tariff would offer these in most need long-term security and provide much-needed relief from bills that are over 50% higher than pre-crisis. It’s time for the government to consult on these issues so a sustainable solution can be put in place.”

Gillian Cooper, head of energy policy at Citizens Advice, added: “Without the introduction of more long-term targeted support, we’ll see the same crisis repeat every winter. Struggling households unable to pay their energy bills, people unable to top up their prepayment meter, record numbers coming to us for crisis support.

“A social tariff would protect millions of people from excessive energy bills and provide crucial certainty for people who need it most in a new era of high energy costs. The government must deliver on its commitment to introduce better targeted support by April 2024.”

Giving evidence to the House of Commons select committee on energy security and net zero recently, Ofgem chief executive Jonathan Brearley estimated that up to 30% of households could be eligible for a social tariff if it was put in place.

Through our Action on Bills campaign, Utility Week has long been calling for targeted support, such as a social tariff, for the most vulnerable energy customers.

There is growing concern however that winter is fast approaching and the government is yet to announce any new targeted support.

Last week Wera Hobhouse, energy and climate change spokesperson for the Liberal Democrats, accused the government of abandoning vulnerable energy customers.

Speaking to Utility Week Hobhouse voiced her concerns. “Even continuing the energy support scheme from the previous year is ultimately an interim measure whereas a social tariff really embeds the idea that vulnerable people need to have help with their energy bills properly over the long term,” she said.