Members of the End Fuel Poverty Coalition called for a social tariff to be included in the 2024 Spring Budget, the coalition's campaign timeline records for January 20241. The call formed part of a sequence of proposals and interventions on energy tariff reform that the coalition has documented from 2023 onwards1.
The coalition's summary of the social tariff proposal, attributed to David Southgate, formerly of Age UK, describes a discount of 50% on energy bills for eligible households1. Where an overarching price cap is in operation, such as the Energy Price Guarantee, the discounted rate would be set 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 the social tariff must automatically include eligible households so that they do not need to make a switch, and must be universal across suppliers1. It also states that it must include households on fixed tariffs and be extended to those on alternative fuels and payment types, such as prepayment meters, and that it should sit alongside existing consumer protections rather than replace the Warm Home Discount1. A £500 million ring-fenced flexible support fund is included for households in need but outside the criteria, and the proposal asks government to finance the tariff directly from Treasury spending to avoid consumer cross-subsidies1. The lowest cost expectation is given as £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.
The coalition's page also sets out two alternative approaches. The New Economics Foundation proposal for a Universal Basic Energy allowance would use a Rising Block Tariff model with two or three bands, with the first band 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, seeing 50% of these units free for every household1. Three additional allowances, exempting households on means-tested benefits from premium rates and providing an extra free block per child per household and per disabled resident, would cost roughly £2.4bn, illustratively pegged to the current cost of schemes such as the Warm Home Discount and Winter Fuel Payments1. Fuel Poverty Action's Energy For All proposal is described as going further, starting with a free allocation of energy based on need and funded substantially from fossil fuel profits1.
The timeline records that 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 consumers, and that in October 2023 over 140 organisations wrote to the Government urging it not to abandon plans to consult on tariff reform1. In July 2023 the Government appeared to rule out a social tariff consultation1. Earlier statements recorded on the page include the Prime Minister telling the House of Commons on 18 January 2023 that "we are also consulting on the best thing to do [on energy bills] going forward, including options… such as a social tariff", and the Secretary of State for Energy Security and Net Zero telling the Commons on 18 April 2023 that "We do think that things like a social tariff could be very helpful…"1.
"JANUARY 2024 : End Fuel Poverty Coalition members call for a social tariff to be included in the 2024 Spring Budget."
Why it matters for households
A social tariff as 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 tariff. The proposal's stated design would extend the discount to households on fixed tariffs and to prepayment meters and alternative fuels, which are often excluded from support schemes. The coalition's page records that the proposal is intended to sit alongside the Warm Home Discount rather than replace it, so households receiving that discount would not lose it under the model set out. The cost figures given, £5.6bn to £9.4bn a year, indicate the scale of public spending the proposal assumes, and the proposal asks for that spending to come from Treasury funds rather than from other customers' bills. For a household, the practical question of what a unit of energy costs and what standing charges apply sits with the tariffs a supplier offers and the price cap that limits default rates; a social tariff would operate as a discount against those rates for those who qualify. The relationship between bill levels and a household's ability to control its own energy costs is set out in Energy Bills and Energy Independence, and the full history of the proposal is covered in A Social Tariff for Energy: The Proposals and Where They Stand.
What happens next
The coalition's timeline records that 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 Cap, with coalition responses available on its correspondence page1. In June 2024, polling was published suggesting that just 11% of the public oppose the idea of a social tariff1. No further dated steps are given on the page.
Sources1 cited
- What next for energy bills? - End Fuel Poverty Coalition, endfuelpoverty.org.uk