Energy bosses urge Hunt to bring in social tariff to support vulnerable households
The Budget received a mixed response from the energy sector, with bosses of suppliers praising Chancellor Jeremy Hunt’s decision to extend the support package for households but calling for a more expansive policy response to ultra-high energy bills – including a social tariff.
Hunt has maintained the Energy Price Guarantee at a subsidy rate of £2,500 per year for another three months, with the expectation this will shield energy users before energy bills drop in the second half of the year to reflect plummeting gas prices.
Greg Jackson, founder of Octopus Energy, considered the extension of energy bill support at a subsidy rate of £2,500 per year for another three months as a “huge relief for millions of customers.”
He said: “Wholesale costs are falling, but they are still significantly higher than normal levels. This help is vital not only for households, but also for helping the economy and tackling inflation.”
Nevertheless there were growing calls in the industry for the government to look at a more long-term form of support – such as the possibility of a social tariff.
This follows Citizens Advice’s report earlier this month calling for a social tariff to ease the high prices facing vulnerable customers during the energy crisis.
So far, Hunt has stayed away from proposing any targeted energy policies for vulnerable users beyond pre-existing benefits such as universal credit and the Warm Home Discount.
Good Energy chief executive Nigel Pocklington said: “Responses to the energy crisis have been dominated by short-term solutions for far too long, when we actually need a longer-term view if we want to achieve real and lasting change for consumers.
“This should include a proper debate on the introduction of a social tariff which would provide targeted support for those who need it most and would help to prevent desperate households falling into fuel poverty.”
Michael Lewis, chief executive of EON also backed a social tariff – arguing it would provide support for those who need it most.
He said: “A so called social tariff based around the principle of a rebate as advocated by last week’s independent report by Citizens Advice should be developed and be in place for next spring which will benefit millions of financially vulnerable customers.
“Ahead of this, I will continue to urge Government to ensure a new short term targeted energy bill support scheme is operational by the winter of 2023 so people are not hit as hard as they might otherwise be.”
Ofgem boss Jonathan Brearley and Chris O’Shea, chief executive of British Gas owner Centrica, also both backed a social tariff during their grilling from MPs yesterday over forced prepayment meters.
“The more I think this could make perfect sense,” said O’Shea.
The government has been approached for comment.