Green Alliance published a report on 2 September 2025 setting out the case for a social tariff on energy bills, modelled in three designs, which it says would support fuel poor households more effectively than the current flat-rate Warm Home Discount1.
The report states that the energy crisis, driven by fossil fuel price shocks, has pushed nine million households in England into fuel poverty, defined there as spending over ten per cent of income on energy bills1. It puts the Warm Home Discount at £150 annually, against an average fuel poverty gap of £407, and says the scheme lifted only one per cent of households out of fuel poverty in 20241.
Green Alliance says its modelling of three tariff designs shows targeted support could lift between 12 per cent and 50 per cent of fuel poor households out of the poverty threshold, reaching working families and those with high energy needs that it says are currently excluded from government support1. The report was written by Sophie O'Connell, Amira Jamal and Nick Davies, and is published alongside a separate methodology document1.
"In this report, we explore how a social tariff offering percentage discounts on gas and electricity bills could provide far more effective support than existing flat-rate schemes."
The report does not set out a single preferred design among the three it models, and no cost to government, funding mechanism or implementation timetable is given in the published summary1. The three designs are not described in detail in the summary text; the full report and methodology are available from Green Alliance1.
| Measure | Figure given |
|---|---|
| Households in fuel poverty, England | 9 million1 |
| Fuel poverty definition used | Over 10 per cent of income on energy bills1 |
| Warm Home Discount | £150 annually1 |
| Average fuel poverty gap | £4071 |
| Households lifted out of fuel poverty by the Warm Home Discount, 2024 | 1 per cent1 |
| Households lifted out of fuel poverty under modelled social tariffs | 12 to 50 per cent1 |
Why it matters for households
The report's central claim is about the shape of support rather than its size: a percentage discount on a bill scales with what a household actually spends, while a flat payment does not1. For a home with high energy needs, whether from poor insulation, electric heating or a large household, that difference determines whether support closes the gap between income and bill or only narrows it1. The £407 average gap cited against the £150 discount is the report's illustration of that shortfall1.
For energy independence, the practical question a social tariff raises is who absorbs the cost of the discount and how it is recovered, since a discount on unit rates or standing charges changes the effective price a household pays per unit1. The report does not address funding or cost recovery in its published summary, so how a social tariff would be paid for has not been reported1. Eligibility is the other open point: the report says its designs would reach households currently excluded from support, but the criteria are not set out in the summary1.
What happens next
No next steps, consultation date or government response is given in the published material1. The report and its methodology are available to download from Green Alliance1.
Sources1 cited
- Affording warm homes: the case for a social tariff to address fuel poverty » Green Alliance, green-alliance.org.uk