Key Points

  1. The UK needs a social energy tariff to rebalance its broken energy market
  2. Energy affordability is a long-term problem that needs a long-term solution
  3. An opt-out, automatic social energy tariff is one of the only things that can effectively address fuel poverty in the UK

The 30-Second Pitch

There is a moral imperative to fix the UK’s broken energy market, which has been exposed by the cost-of-living crisis. The introduction of an opt-out social energy tariff will help do this.

A social energy tariff will protect the most vulnerable people from spending excessive amounts on their bills, so they never have to face another winter in distress and discomfort.

Social tariffs have been offered by energy suppliers before. An opt-out system should be created across the UK, where eligible customers do not have to take action in order to be offered the cheapest deal.

By linking eligibility to those in receipt of benefits or on low incomes, a social energy tariff funded by the UK Government and the industry could dramatically reduce fuel poverty.

All political parties should unite behind a social energy tariff but only the UK Government has the power to act. The Chancellor should use the next Budget to introduce one.

What is a social energy tariff?

A social energy tariff provides vulnerable consumers with discounts on their gas and electricity bills, so they pay a lower price than other customers with the same provider.

Such tariffs were previously offered voluntarily by major energy suppliers, before being phased out after the Warm Homes Discount was introduced in 2011.

How would people qualify for the social energy tariff?

The precise criteria for qualifying to receive a social energy tariff would be a matter for the UK Government, but it could be targeted at those most in need, such as those in receipt of means tested benefits or disability support.

It could also consider the unique challenges of Scotland’s energy landscape, with eligibility based on household income and energy efficiency.

Opt-Out

Why are you calling for an opt-out system?

An opt-out system is needed because unless the most vulnerable people are enrolled automatically on a social tariff, thousands if not millions could miss out on the benefits.

Evidence from the use of social tariffs in the broadband industry shows that take-up is low under an opt-in system. Ofcom research has shown that only 5 per cent of eligible households had signed up by April 2023.

Why is it needed now - haven’t energy prices peaked?

People across Scotland and the UK are still struggling due to the twin cost-of-living and energy crises, which have exerted extreme pressure on household budgets.

Advice Direct Scotland’s energyadvice.scot service is continuing to experience a significant surge in demand from people seeking assistance with bills, debts, and disconnections.

Regardless of what happens to the Ofgem price cap and people’s bills in the short-term, the issue of energy affordability is a long-term problem that needs a long-term solution.

While there are existing regulations for energy suppliers to provide support to struggling households, they do not go far enough to stop fuel poverty and prevent people building up unaffordable debts.

The fact is that only an opt-out social energy tariff can effectively prevent fuel poverty, and there is a clear moral imperative for the UK Government to intervene.

Who would fund it?

A social energy tariff could be funded jointly by the UK Government working in co-operation with energy suppliers.

Polling suggests that the public are overwhelmingly in favour of the policy.

Polling suggests that the public are overwhelmingly in favour of the policy.

How can a social energy tariff be achieved?

Only the UK Government has the power to introduce a social energy tariff. The Chancellor could make an announcement in the Budget on March 6th, 2024.

Advice Direct Scotland (ADS) strongly supports the growing calls within the third sector and the Scottish Government for change and believes now is the time to act.

The campaign is the first time that ADS, the charity which runs Scotland’s national advice service, has actively campaigned for policy change.

Social energy tariff history

Yes, they were previously offered voluntarily by major energy suppliers, before being phased out after the Warm Homes Discount was introduced in 2011.

Customers who qualified for such tariffs included those aged over 60, those on means-tested benefits, and those living in fuel poverty or on a low income.

However, not all customers who originally qualified for these social tariffs were then eligible for the Warm Home Discount – and in the meantime the cost-of-living crisis and energy crisis has pushed more and more households to the brink.

Current energy suppliers discount schemes

Yes, but these are not social tariffs. Some energy companies have funds that are designed to help those who are struggling, but provision is patchy. Only a UK-wide, opt-out social energy tariff can effectively end fuel poverty.

Key Facts

Key Influencers

· Political parties should pledge to introduce one in their manifestos ahead of the next general election

· Politicians and councillors who support the introduction of a social tariff should speak about the need in their constituency and endorse it publicly

· Charities and organisations representing the elderly, disabled and other customers who stand to benefit from a social energy tariff could help to amplify the campaign

· Energy suppliers should be encouraged to back a social tariff and agree to work in co-operation with the Government to introduce one

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