The House of Commons Energy Security and Net Zero Committee came out in favour of introducing a social tariff for specific groups of consumers in September 2023, according to a timeline published by the End Fuel Poverty Coalition1. The committee's position forms one entry in a chronology of tariff reform campaigning that the coalition traces from January 2023 to June 20241.
The proposal most closely associated with the social tariff is credited to David Southgate, formerly of Age UK1. It would discount energy bills by 50% for eligible households. Where an overarching price cap remains in operation, such as the Energy Price Guarantee, the discounted rate would be set 50% below that cap; where markets have returned to normal, the discount would be 50% below the average tariff rate, whether a fixed-term deal or the default tariff cap1. Eligible households are described as including those on means-tested benefits, disability benefit and Carer's Allowance, and in theory anyone below 60% of median household income1. The proposal states that the tariff must automatically include eligible households so that no switch is needed, and must be universal across suppliers, covering households on fixed tariffs and extending 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 alongside it. The New Economics Foundation's Universal Basic Energy proposal would use a Rising Block Tariff with two or three bands, the first offering a free basic amount of energy for every UK household based on average essential consumption, calculated at 1,050 units of electricity and 2,700 units of gas, with 50% of those units free1. Three additional allowances, exempting households on means-tested benefits from premium rates and providing extra free blocks per child and per disabled resident, would cost roughly £2.4bn1. Fuel Poverty Action's Energy For All model starts from a free allocation of energy based on need, funded substantially from fossil fuel profits1.
The coalition's timeline records that the Government appeared to rule out a social tariff consultation in July 2023, that more than 140 organisations wrote to the Government in October 2023 urging it not to abandon plans to consult on tariff reform, and that the Chancellor confirmed the end of the Energy Price Guarantee without tariff reform in the Spring Budget of March 20241. Earlier, on 18 January 2023, the Prime Minister told the House of Commons:
"…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."
On 18 April 2023 the Secretary of State for Energy Security and Net Zero told the House of Commons: "We do think that things like a social tariff could be very helpful…"1.
Why it matters for households
A social tariff of the kind described would change the rate a qualifying household pays rather than the amount of energy it uses, and would apply automatically, so eligibility would not depend on switching supplier or claiming a separate discount1. That distinguishes it from the Warm Home Discount, which the proposal says it should sit alongside rather than replace1. For a household on a fixed tariff, the discount would reach deals that a supplier-level scheme might not1. The cost figures matter because they indicate the scale of public spending involved: between £5.6bn and £9.4bn a year on the coalition's central estimate, financed from Treasury spending rather than from other billpayers1. The competing models differ in how far support is targeted: the social tariff concentrates the discount on eligible groups, while the Rising Block and Energy For All approaches give every household a free or cheaper first block of units, with higher bands priced above current rates1. Fuel Poverty Action argues that a universal, automatic allocation avoids households falling through the cracks of means-tested criteria, and that a social tariff encourages more energy use where a rising block would reduce it1. How any of this interacts with the energy price cap and with tariff contract terms has not been settled in the published material.
What happens next
The coalition's timeline records that Ofgem and the Government both launched reviews of the Energy Bills Price Cap in April 2024, and that polling published in June 2024 suggested just 11% of the public oppose the idea of a social tariff1. No outcome of those reviews, and no government decision on a social tariff, is reported in the material1.
Sources1 cited
- What next for energy bills? - End Fuel Poverty Coalition, endfuelpoverty.org.uk