Explainer-in-brief: a social tariff to keep the heating on
Energy bosses yesterday called for a social tariff to try and ease pressures on those hit hardest by the spike in energy prices. Such a plan would require the government to implement legislation for a tariff below the Ofgem price cap – which is subject to variability in energy prices.
It would require each provider to pay into a central pot based on the number of customers they have. Those funds would then be used to subsidise the bills of those most at-risk of not being able to afford to turn on the heating.
Social tariffs already exist within the broadband industry. The eligibility requirements differ from provider to provider, but being on universal credit or receiving other types of benefits will often mean you are able to claim basic services at a lower cost.
Most suppliers including EDF, E.ON, British Gas and Scottish Power have backed calls. Octopus Energy is one of the outliers against a social tariff.