By Elena Siniscalco
As a cold snap hits the UK, people are being paid conserve energy in case we (say it quietly) face blackouts. But it has also reignited a debate on social tariffs, with gas prices set to stay high for years to come.
It’s freezing. In London last night, it was -5 degrees and you can see your breath on the air.
The cold snap has reignited the debate around the price of energy (which never really went away) and how to help households across the country.
The government’s support will start to taper down and it won’t last forever. The energy price guarantee scheme capping average household bills at £2,500 a year, rising to £3,000 from April, will end April next year. Campaigners and some of the big players in the sector are already thinking about what will happen when this support ends.
Last week they started pushing for a so-called “social energy tariff” which would make bills cheaper for people on low income when the government support ends next year. Social tariffs already exist in several European countries – including Belgium, Italy, France and Spain. Funding would come through taxpayers’ money or by spreading the cost among those who can afford to pay more.
Ninety-five non-profits and charities have penned a letter to Chancellor Jeremy Hunt asking him to introduce the tariff – and they’re not alone. Energy companies like EDF and E.ON have also spoken out in favour of the measure. Today, the chief executive officer of energy regulator Ofgem also argued there is a strong case for examining a social tariff for vulnerable households.
The energy crisis has pushed more than 6.7 million households into fuel poverty, up from 4.5 million in October 2021, according to National Energy Action. This is coupled with the possibility energy prices will stay high until 2030,
Obviously such a scheme won’t be easy to implement: it would require complex data sharing between the charities who support people who can’t afford their energy bills, the government, the energy suppliers and the energy regulator. But it’s not impossible.
\The government would be able to draw insights on the best way forward from the many European countries who have introduced the measure already. In the UK, a social tariff already exists for broadband, where people qualify for better deals if they receive certain means-tested benefits. Arguably being able to warm your home is just as important as connecting to the internet.
The post Explainer: The case for a social energy tariff appeared first on CityAM.
