Social Energy Tariff

When I held a debate on this topic in November, I was heartened by the cross-party support and atmosphere in Westminster Hall as Members from across the political spectrum presented a united front on this matter, each raising the need for longer-term, targeted support for the most vulnerable households. I was then immediately disheartened by the lack of a meaningful response from the Under-Secretary of State for Energy Security and Net Zero, the hon. Member for Derby North (Amanda Solloway), and now—over two months on from that debate, and 14 months on from the Government’s initial call for a consultation—we are no further along.

Government Members highlight that energy bills have fallen from last year, but that does not paint a picture of the reality for many. Even though we are told that the energy market has stabilised, bills remain sky high, and winter 2023-24 is projected to be much worse due to the huge levels of energy debt accrued last year. Ofgem and Citizens Advice research shows that energy debt is at the highest level ever, and Ofgem’s chief executive officer, Jonathan Brearley, has said that

“we think there is a case for examining, with urgency, the feasibility of a social tariff”.

In the absence of an energy bill support scheme this winter, many people have had to once again choose between heating and eating. Some conditions require the constant charging of essential lifesaving equipment, such as oxygen concentrators or feeding pumps. It is dreadful that, in the UK in 2024, some households have been forced to self-disconnect, but that is simply not possible for many disabled households, as they would not survive.

A coalition of charities—Age UK, Scope, Fair By Design, Mencap, the Motor Neurone Disease Association and Sense—warns that the cost of living crisis is still adding huge pressures to household finances, with millions facing the dilemma of how they are going to pay their energy bills. Around one in eight households in the UK—that is 12% of households, or 3.4 million—are experiencing fuel poverty this winter. Marie Curie shared with me the thoughts of Rhian, who is terminally ill:

“People with terminal illnesses feel the cold so much more than the healthy and need to heat their homes. People with terminal illnesses still have mortgage or rent and bills to pay. There are no specific benefits offered to help terminally ill people so they have to carry on working with debilitating symptoms. I live with incurable terminal cancer. My monthly heating bill is currently more expensive than my mortgage.”

A social energy tariff is the best way forward. That tariff must be in addition to the warm home discount and the default tariff price cap; it must be targeted at the neediest and go beyond the benefits system, as National Energy Action has estimated that approximately two thirds of fuel-poor households do not receive any social security payments. All eligible consumers should be auto-enrolled using suppliers’ existing data and/or data shared by the Department for Work and Pensions, and the tariff must reduce costs for consumers to pre-crisis levels.

We all know that a social tariff will cost money, so it is essential that those costs are met in a progressive manner. If not, the tariff risks creating a significant cliff edge, with those who narrowly miss out being much worse off. National Energy Action, Citizens Advice and Centrica all say that an energy social tariff should be funded by general taxation to ensure the greatest level of fairness. If that cannot be done, low-income households on the fringes of support must be exempted from paying towards the social tariff. The Government have said that the new round of oil and gas licensing would raise money to reduce bills. A social tariff would have numerous economic benefits; it would also offset costs, as illnesses brought on by having a cold and damp home cost the NHS between £500 million and £1.4 billion a year. Further, increased spending power could boost local economies, with more money spent on our high streets.

Millions of the most vulnerable households and organisations spanning all of civil society are shouting from the rafters for the implementation of a social energy tariff, and the Government cannot and must not continue to bury their heads in the sand. A society should be measured by how it treats its most vulnerable, and this Government, through inaction, are continuing to fail the most vulnerable households right across the country. There were 4,950 excess winter deaths last year in the UK that were down to people living in cold and damp houses, and that is why we need this Bill. Millions of people cannot wait any longer, and that is why I am asking for support for this motion.

That Marion Fellows, Peter Aldous, John McDonnell, Cat Smith, Owen Thompson, Kirsten Oswald, Alison Thewliss, Patricia Gibson, Dave Doogan, David Linden, Alyn Smith and Drew Hendry present the Bill.

Marion Fellows accordingly presented the Bill.