Energy boss revives social tariff push as winter pain looms
The government needs to use data to provide targeted support for up to 10m households ahead of winter, warned the boss of a domestic energy firm, reigniting calls for a social tariff.
Monica Collings, chief executive of challenger supplier So Energy, told City PM that the government’s support packages were both too expensive and failed to provide support quickly enough to vulnerable households.
She has welcomed the latest report from the Public Accounts Committee, a Westminster panel of MPs.
It revealed that 1.7m people were left waiting months for help due to the government’s “lack of bandwidth” to ensure all groups – including those who were vulnerable – received support at the same time.
The committee, which is chaired by Labour MP Dame Meg Hillier, has now called on the government to clarify how they will protect consumers from future price rises “as a matter of urgency.”
It argued that the government should further prioritise households most in need to deliver value for money, and warned that it needs to be better prepared to support vulnerable customers in the future.
Collings believed the report exposed the “sheer cost and complexity of developing and implementing broad-brush support schemes within a very short timeframe” – opening up the possibility of a social tariff.
She said: “Despite the price cap coming down in July, due to the removal of government support schemes that were in place last winter, households will be paying more for energy this winter, plunging millions more into fuel poverty.
That is why the government needs to act now, to utilise data matching to better target support at the 10m households on means tested benefits ahead of this winter. This will avoid the need for another costly and inefficient universal winter support package, and instead give more support to those genuinely struggling to heat their homes.”
Collings’ push for instant relief targeted at households follows calls from Citizens Advice, the Institute of Economic Affairs, and British Gas owner Centrica earlier this year for a social tariff to be brought in to ease household bills.
The concept is currently being considered by Ofgem, which has is reviewing the measure in an industry consultation.
One combination of personal data proposed by Citizens Advice is to combine HMRC’s real-time data on household incomes, with energy suppliers data on how much electricity and gas each household uses.
Energy specialist Cornwall Insight expects the price cap to remain slightly above £2,000 per year this winter, below the level of subsidised support offered in the Energy Price Guarantee.
This roughly double the price of energy bills prior to the domestic crisis and Russia’s invasion of Ukraine, leaving millions of Brits potentially exposed to higher costs with less help from the government.
The government has been approached for comment.