The Chancellor confirmed the end of the Energy Price Guarantee and did not include tariff reform in the Spring Budget, according to a timeline published by the End Fuel Poverty Coalition1. The confirmation is dated March 2024 in that record1.
The Energy Price Guarantee was the mechanism that limited the unit cost of gas and electricity for households. Its closure means the scheme that sat behind domestic bills is no longer the framework for consumer protection. The coalition's account places the decision alongside the absence of any tariff reform measures in the Budget1.
The coalition's timeline sets out how the debate reached that point. In November 2023, proposals for an Emergency Energy Tariff using the Energy Price Guarantee mechanism were presented to Government1. In October 2023, more than 140 organisations wrote to the Government urging it not to abandon plans to consult on tariff reform1. 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 January 2024, coalition members called for a social tariff to be included in the 2024 Spring Budget1.
The coalition summarises several proposals that were put to Government. One social tariff proposal would discount energy bills by 50% for eligible households1. If an overarching price cap were still in operation, it would be set 50% below the cap; if markets had returned to normal, the discount would be 50% below the average tariff rate1. Eligible households would include those on means-tested benefits, disability benefit, Carer's Allowance, and in theory anyone below 60% of median household income1. The proposal 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. Its 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.
A separate proposal for a Universal Basic Energy allowance would use a Rising Block Tariff with two or three bands1. The first band would offer 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.
"MARCH 2024: The Chancellor confirms the end of the Energy Price Guarantee and doesn't include tariff reform in the Spring Budget."
Why it matters for households
The Energy Price Guarantee was the scheme that held down the unit price of gas and electricity for every household. With it closed and no tariff reform in the Budget, the shape of consumer protection for the coming period rests on the price cap and on whatever replaces the guarantee, which has not been reported. For a household, the practical question is what determines the rate it pays and whether any discount for lower incomes exists at all. The proposals described above would have changed how bills are calculated rather than simply how much support is paid: a social tariff would cut the bill for eligible homes, while a rising block model would make a set amount of energy free and charge more for heavy use. Neither was adopted in the Budget1. Households on fixed deals, prepayment meters or alternative fuels are named in the social tariff proposal as groups that any scheme should cover, which indicates the gaps a cap alone leaves1. Support for households in debt continues to sit with separate arrangements such as the British Gas Energy Trust, and the relationship between bills, energy independence and the choice between a fixed tariff and the price cap remains the day-to-day decision for homes.
What happens next
The coalition records that 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. The social tariff proposals and where they stand have not moved beyond that point in the record.
Sources1 cited
- What next for energy bills? - End Fuel Poverty Coalition, endfuelpoverty.org.uk