In July 2023 the Government appeared to rule out a consultation on a social tariff for energy, according to a timeline published by the End Fuel Poverty Coalition1. The coalition's account states that ministers had previously said they intended to consult on options in summer 20231.
The same timeline records that on 11 May 2023 the Government responded to petition 624795, "Introduce an unmetered monthly tariff for energy for the elderly and disabled", saying: "The Government is considering potential approaches to consumer energy protection post-April 2024. The Government intends to consult on options in summer 2023"1. On 12 July 2023 the Deputy Prime Minister told the House of Commons: "As my right hon. Friend the Chancellor set out in his autumn statement, we are exploring the best approach to consumer protection from April 2024 as part of wider retail market reforms"1.
Earlier ministerial statements in the timeline had been more open to the idea. On 18 April 2023 the Secretary of State for Energy Security and Net Zero told the Commons that: "We do think that things like a social tariff could be very helpful…" when the Energy Price Guarantee ends in April 20241. On 18 January 2023 the Prime Minister told the Commons that "…we are also consulting on the best thing to do [on energy bills] going forward, including options… such as a social tariff, as part of our wider reforms of the retail energy market"1.
"JULY 2023: The Government appears to rule out a social tariff consultation."
The coalition's page also sets out the main social tariff proposal it supports, attributed to David Southgate, formerly of Age UK. It would discount energy bills by 50% for eligible households, set 50% below the cap if an overarching price cap such as the Energy Price Guarantee is still operating, or 50% below the average tariff rate if markets have returned to normal1. Eligible households would include those on means-tested benefits, disability benefit, Carer's Allowance, and in theory anyone below the 60% median of household income1. The proposal states the tariff must automatically include eligible households, be universal across suppliers, include households on fixed tariffs and extend to alternative fuels and payment types such as prepayment meters1. It also allows a £500 million ring-fenced flexible support fund and asks government to finance the tariff directly from Treasury spending to avoid consumer cross-subsidies1. The lowest cost expectation is £5.6bn for 2024-25, assuming a typical bill of £1,000 a year, with the most likely annual cost calculated as between £5.6bn and £9.4bn1.
Two alternative models appear on the same page. The New Economics Foundation's Universal Basic Energy proposal would use a rising block tariff with two or three bands, giving 50% of an essential consumption block free for every household, calculated at 1050 units of electricity and 2700 units of gas1. It includes three additional allowances, exempting households on means-tested benefits from premium rates and adding an extra free block per child per household and per disabled resident, at a cost of roughly £2.4bn1. Fuel Poverty Action's Energy For All proposal starts with a free allocation of energy based on need, funded substantially from fossil fuel profits1.
Why it matters for households
A social tariff would change what an eligible household pays rather than how much energy it uses, which is why the design details matter for a home's energy independence. The coalition's proposal is explicit that the discount would be automatic and universal across suppliers, so eligible households would not need to switch supplier or tariff to receive it1. It also states the tariff must sit alongside existing consumer protections and should not be seen as a replacement for the Warm Home Discount1. The alternative models on the same page work differently: the rising block tariff would make a baseline block of energy free or cheaper and charge premium rates for very high use, with high-income high-usage consumers cross-subsidising low-income low-usage households1. Fuel Poverty Action argues that a universal, automatic free allocation means no one falls through the cracks, and that a social tariff encourages more energy use whereas a rising block tariff would reduce it1. The coalition's page does not report any Government decision on the design of consumer protection from April 2024 beyond the July 2023 position1.
What happens next
The timeline records later developments. In August 2023 the End Fuel Poverty Coalition wrote to MPs asking them to hold the Government to account for not consulting on a social tariff as promised1. In September 2023 the House of Commons Energy Security and Net Zero Committee came out in favour of introducing a social tariff for specific groups of consumers1. In October 2023 over 140 organisations wrote to the Government urging it not to abandon plans to consult on tariff reform1. In November 2023 proposals for an Emergency Energy Tariff using the Energy Price Guarantee mechanism were presented to Government1. In January 2024 coalition members called for a social tariff to be included in the 2024 Spring Budget, and in March 2024 the Chancellor confirmed the end of the Energy Price Guarantee and did not include tariff reform in the Spring Budget1. In April 2024 Ofgem and the Government both launched reviews of the Energy Bills Price Cap1. In June 2024 polling was published suggesting that just 11% of the public oppose the idea of a social tariff1.
Sources1 cited
- What next for energy bills? - End Fuel Poverty Coalition, endfuelpoverty.org.uk