Ninety-five charities and non-profit organisations across the UK sent an open letter to the Chancellor, Jeremy Hunt MP, on 17 January 2023 calling for more targeted support in the form of a social tariff for the energy market1. The letter was sent on the same day that National Energy Action (NEA) and Energy Action Scotland published their latest Fuel Poverty Monitor1.
A social tariff is defined in the announcement as "a targeted discount energy deal for qualifying low-income consumers", typically priced below the cheapest available energy tariff and aimed at those living in fuel poverty or on a low income1. The organisations behind the letter, including Age UK, Fair by Design, NEA and Scope, said support should reach households on means-tested benefits, disability benefits and Carer's Allowance, as well as those missing out on welfare support but still struggling with their bills1.
"95 Charities and non-profit organisations across the UK have joined together to call for more targeted support in the form of a social tariff for the energy market"
NEA estimates that the energy crisis has pushed over 6.7 million UK households into fuel poverty, up from 4.5 million in October 2021, and that the number of fuel poor households across the UK is expected to rise to 8.4 million from April 20231. Fuel poverty is defined in the announcement as households spending more than 10 per cent of their after-tax income on energy costs to maintain an adequate standard of warmth1. The Fuel Poverty Monitor drew on a Call for Evidence that received responses from 119 respondents covering the breadth of the UK, and found that households on the lowest incomes, in the least efficient homes and on pre-payment meters are being hardest hit by energy price increases1.
Polling by Opinium for Age UK, conducted between 2 and 9 January 2023 with a sample of 1,010 adults aged 60 and over in Great Britain, found 71 per cent agreed a social energy tariff should be available for those who need it most, rising to 76 per cent among those with a disability1. The same polling found 24 per cent of over-60s were living in homes colder than they would like, rising to 27 per cent for older people with a disability1.
| Measure | Figure |
|---|---|
| Organisations signing the open letter | 95 |
| Households in fuel poverty, NEA estimate | Over 6.7 million, up from 4.5 million in October 2021 |
| Expected fuel poor households from April 2023 | 8.4 million across the UK |
| Over-60s supporting a social tariff | 71 per cent, rising to 76 per cent of those with a disability |
| Over-60s in homes colder than they would like | 24 per cent, rising to 27 per cent for older people with a disability |
Why it matters for households
The letter and report land at a point when two existing support mechanisms change. From April 2023, the Government's Energy Bills Support Scheme comes to an end and the support provided by the Energy Price Guarantee will be reduced1. The organisations warned that without continued financial support, many older and disabled people face an uncertain future, with some relying on medical equipment such as dialysis machines struggling to keep it turned on and stay warm1. For a household, the practical difference between universal support and a social tariff is that a tariff would be targeted at qualifying low-income consumers rather than applied across the board, which is the distinction set out in the comparison with the Warm Home Discount. The report also notes that households on pre-payment meters have faced the biggest challenges accessing support and are at acute risk due to self-disconnection1. How the energy price cap and the Energy Price Guarantee interact with any future tariff has not been reported.
What happens next
The Fuel Poverty Monitor recommends that the Government urgently consults on a mandatory social tariff to begin in April 2024, or sooner if practicable, with targeting that goes beyond households receiving means-tested benefits1. No response from the Chancellor or the Government to the open letter has been reported. Age UK and Scope are also asking the public to sign a letter to the Government in support of the call1.