The government announced in the autumn statement of November 2022 that it would take a "new approach to consumer protection from April 2024" on energy, saying it would "work with consumer groups and industry to consider the best approach, including options such as social tariffs, as part of wider retail market reforms"1. The consultation promised under that announcement had not been published by October 2023, when a Commons Library debate pack on energy social tariffs was issued ahead of a Westminster Hall debate1.
The announcement sat alongside the support measures introduced during the energy crisis. The Energy Price Guarantee (EPG), announced by then Prime Minister Liz Truss on 8 September 2022 and introduced from 1 October, set maximum prices for gas and electricity below those under the existing price cap, with the government paying suppliers the difference1. It was set at £2,500 a year for typical levels of consumption and was initially planned to last two years; in the spring Budget of March 2023 the government said it would remain at £2,500 until the end of June 2023 and then rise to £3,000 from July 2023 to March 20241. The EPG is set to end in 20241.
Other measures have already closed. The Energy Bill Support Scheme gave every household with a domestic energy connection in Great Britain a £400 discount on bills for winter 2022 to 2023, and ended in March 20231. Households using alternatives to mains gas for heating, such as heating oil, LPG or coal, received a one-off £200 credit from February 20231. Separately, all licensed suppliers with more than 50,000 customers are obligated to offer a £150 discount each winter to those in receipt of certain benefits1.
The debate pack sets out the pressure that prompted calls for targeted support. The price cap rose by 54% in April 2022 and Ofgem planned a further 80% increase on 1 October 20221. Wholesale prices have since fallen below the level of the EPG, and the price cap fell again in October 2023 to £1,923, but annual bills for typical consumption under the cap remain almost £800, or 69%, above summer 2021 levels1. Spending on energy rose with income, from around £23 per week in 2021-22 among the 10% of households with the lowest incomes to £32 per week among the 10% with the highest, but took a far larger share of total expenditure at the bottom: 7.4% in the lowest decile and 6.9% in the second, against 3.5% in the highest1.
Self-disconnection among prepayment meter customers rose sharply. The number of smart prepayment customers in Great Britain who disconnected their electricity at least once for more than three hours rose from 165,000 in the final quarter of 2021 to 269,000 in the first quarter of 2023, a 63% increase; for smart gas prepayment meters the figure rose from 193,000 to 534,000, an increase of 178%1. Those data cover around half of the 4 million customers with prepayment meters1.
An open letter to the Prime Minister dated 29 September 2023 calling for a social tariff argues that it would offer a long-term solution to fuel poverty, and has been supported by over 130 organisations1. The debate pack describes a social tariff as often understood to be a levy or subsidy-funded reduction in the cost of basic utilities for targeted groups of customers, typically those least able to pay1.
"work with consumer groups and industry to consider the best approach, including options such as social tariffs, as part of wider retail market reforms"
Why it matters for households
The EPG and the Energy Bill Support Scheme were universal and temporary. The EPG is set to end in 2024 and the EBSS ended in March 2023, leaving the energy price cap as the main limit on default tariff prices1. The cap does not cap maximum annual bills; it limits unit prices and standing charges, so a household that uses more energy pays more1. A social tariff, as described in the debate pack, would instead be a targeted reduction for named groups of customers, typically those least able to pay1. Whether such a mechanism replaces any part of the current support, and who would qualify, has not been reported.
For a household, the practical questions are which body would set the terms and how eligibility would be assessed. Consumer protection in the retail market sits with the Department for Energy Security and Net Zero and Ofgem, and the wider framework of regulation and policy shapes what suppliers must offer. Homes on heat networks fall under separate heat network regulation, and some energy and buildings policy is devolved, including in Wales. Voluntary codes such as the Renewable Energy Consumer Code and TrustMark cover installation work rather than tariff design.
What happens next
A Westminster Hall debate on energy social tariffs was scheduled for 23 November 2023, chosen by the Backbench Business Committee and opened by Marion Fellows MP1. The debate pack also records an earlier scheduled debate at 3pm on 26 October1. The government consultation on the new approach to consumer protection from April 2024 had not been published as of October 20231.
Sources1 cited
- CDP-2023-0202.pdf, researchbriefings.files.parliament.uk