The UK government has been accused of betraying the most vulnerable in society by seemingly abandoning support for a social tariff that would help households pay for their gas and electricity.
Fuel poverty campaigners were left angry after ministers failed to include plans for a social tariff from next spring in energy market reforms, despite commitments in two budget statements.
Jeremy Hunt, the chancellor, promised to consider a social tariff for energy bills in the autumn statement as part of a pledge to help vulnerable people.
In the spring statement earlier this year, the Treasury confirmed the government was “developing a new approach” to protect households from increasing energy costs from April 2024, including consideration of a social tariff.
Ministers appeared to abandon the plans by failing to raise the option of a social tariff – which would set the price of gas and electricity well below the cap on energy prices – in a wide-ranging set of reforms designed to strengthen the retail energy market after scores of suppliers went bust.
A spokesperson for the Labour party said: “This is typical of a government that makes promises and breaks them. They are more interested in protecting fossil fuel windfall profits than vulnerable households.”
Almost 100 charities and non-profit organisations have written to ministers calling on the government to move quickly to legislate a social energy tariff that would offer vulnerable households discounts on their bills. The plans also have the support of the energy industry and the sector’s regulator.
Peter Smith, a policy director at National Energy Action (NEA), a fuel poverty campaign group, said: “Failure to even consult on [a social tariff] would be a betrayal of the most vulnerable in our society and create further distrust in the energy market.”
The NEA was one of 95 groups that signed a letter to the government earlier this year calling for a discounted, targeted tariff to be made available to people on existing means-tested and disability benefits, and the carer’s allowance, alongside “those still struggling with their bills but missing out on support from the welfare system”.
There is widespread concern over low-income, elderly and disabled people being cut off from energy supplies after being forced on to prepayment meters that they cannot afford to top up.
Earlier this year, Jonathan Brearley, the chief executive of Ofgem, said there was a case for urgently examining a social tariff that would limit the impact of extremely high prices for a defined set of vulnerable groups.
Social tariffs are common in the telecoms industry, and are also offered by many regional water companies – leading to calls for all energy suppliers to offer them, too.
Gillian Cooper, the head of energy policy at Citizens Advice, said: “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 promised to introduce better targeted support by April 2024 but, with parliament now in recess time is running out. Without the introduction of more long-term targeted support, we’ll see the same crisis repeat every winter. The government must deliver on its commitment,” she added.
A government spokesperson said the outlook for energy prices had improved significantly, and it would continue to monitor the situation while keeping options under review, including with respect to the most vulnerable households.
Smith said that the recent fall in energy prices was “no grounds for complacency”.
“The energy crisis has dragged millions of people into fuel poverty and, despite July’s [price cap] fall, energy bills continue to be totally unaffordable, leading to an epidemic of negative household budgets,” he said.
A spokesperson for Energy UK, which represents the UK’s largest energy suppliers, warned that targeted energy bill support could not be pushed back further. They urged the government to put in place a “more permanent, long-term solution, such as a social tariff, to ensure all customers can afford their bills”.
The Labour spokesperson added: “Labour is determined to take action to cut bills for all households, particularly the most vulnerable ... We are clear the retail market is not working for those most in need.”
