Proposals for an Emergency Energy Tariff, using the Energy Price Guarantee mechanism, were presented to Government in November 2023 to help ease the energy bills crisis in winter 2023/241. The presentation is recorded in a timeline of campaign activity published by the End Fuel Poverty Coalition, an independent organisation1.
The proposal discounts energy bills by 50% for eligible households1. Where an overarching price cap is still in operation, such as the Energy Price Guarantee, the discounted rate would be set at 50% below the cap; if 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 given as those on means-tested benefits, disability benefit, Carer's Allowance, and in theory anyone below the 60% median of household income1.
The proposal states that a social tariff must automatically include eligible households, so that they do not need to make a switch, and must be universal across suppliers1. It outlines that the tariff must include households on fixed tariffs and be extended to those on alternative fuels and payment types, such as prepayment metres1. 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, which would be higher if bills go up; the most likely annual cost is calculated as between £5.6bn and £9.4bn1.
The timeline records that in October 2023 over 140 organisations wrote to the Government urging it not to abandon plans to consult on tariff reform, and that in September 2023 the House of Commons Energy Security and Net Zero Committee came out in favour of a social tariff for specific groups of consumers1. In July 2023 the Government appeared to rule out a social tariff consultation1. 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. Polling published in June 2024 suggested that just 11% of the public oppose the idea of a social tariff1.
The page also sets out two other proposals. A Universal Basic Energy allowance, created through a Rising Block Tariff model with two or three bands, would make 50% of average essential consumption free for every household, calculated at 1050 units of electricity and 2700 units of gas, with three additional allowances costing roughly £2.4bn1. Energy for All, from Fuel Poverty Action, starts with a free allocation of energy based on need, funded substantially from fossil fuel profits1.
"The social tariff must automatically include eligible households, so that they don't need to make a switch and so it must be universal across suppliers."
Why it matters for households
The proposals concern the mechanism that sets the price a household pays per unit, rather than one-off payments. A discount applied below the cap would change the standing relationship between a home's consumption and its bill, and the requirement that eligible households be enrolled automatically would remove the need to switch supplier to receive it. The proposal's extension to fixed tariffs, alternative fuels and prepayment metres addresses homes that sit outside the default tariff route, including those not on mains gas. The stated intention to fund the tariff from treasury spending rather than consumer cross-subsidies bears on whether the cost is spread across all bills or met from general taxation. The separate Rising Block Tariff model would make a set block of units free and charge premium rates above it, which changes the return on reducing consumption or generating a home's own electricity. The tariffs hub sets out how the current cap and tariff types work, and Tariffs and Household Energy Independence covers the link between tariff design and a home's control over its energy costs.
What happens next
The timeline records that the Energy Price Guarantee ended, confirmed in the March 2024 Budget, and that Ofgem and the Government launched reviews of the Energy Bills Price Cap in April 20241. No outcome of those reviews, and no Government decision on a social tariff, is reported on the page1.
Sources1 cited
- What next for energy bills? - End Fuel Poverty Coalition, endfuelpoverty.org.uk