Social Energy Tariff

Marion Fellows Excerpts

1st reading
Tuesday 6th February 2024 Commons Chamber

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to publish proposals for a social tariff for energy.

During the autumn statement of 2022, the Government committed to developing a new approach to consumer protection in energy markets in order to consider the best options, including social tariffs. That commitment has been repeated multiple times since, including by the Prime Minister. In April 2023, the Department for Energy Security and Net Zero reiterated that pledge by promising to consult on a social energy tariff in the summer of 2023. However, despite multiple commitments, and to the frustration of many, a consultation never materialised, and as we are now in February 2024, there is a significant risk that no new protections will be in place this year. All the while, low-income and disabled households have struggled to heat their homes over the festive period and the cold snap in January—and winter is not over yet.

I am introducing this Bill in an attempt to fight for protections for the most vulnerable in society. By their continued inaction on this matter, the Government continue to disregard the real and immediate concerns of many people. The great need for a social energy tariff is best demonstrated by the wide and varied support for its implementation. Disability groups, debt advice groups, politicians from across the political spectrum, consumer groups, local authorities, housing providers, Ofgem and even energy companies are in favour of one.

Such is the united front on this vital issue that it is even more surprising that the UK Government have failed even to hold the consultation that they promised. They have continued to bury their head in the sand, despite the fact that National Energy Action, Energy Action Scotland, Age UK, Scope, Citizens Advice, MoneySavingExpert and 150 other organisations, as well as MPs, wrote to the Prime Minister in September calling for the promised consultation on a social energy tariff. Now we are into 2024, and the situation is catastrophic for low-income households. I thank the many organisations that have provided briefings on this topic both for my debate in November last and once again today.

You may ask what a social energy tariff is, Mr Speaker. Admittedly, many different organisations and groups have slight variations in their approach to such a tariff, but in its most basic form, which is universally agreed upon, it is a system of targeted support through a reduction in energy bills for vulnerable, low-income and disabled households, in response to incredibly high energy bills. As one in three households will spend more on energy bills this winter than they did last winter—a figure that is closer to half for the poorest households—the need for a social energy tariff cannot be stressed enough. Citizens Advice research shows that energy bills are 61% higher than in 2021, while other research suggests that high energy bills will become the new normal for the rest of the decade. That highlights the desperate need for more meaningful long-term support.

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.

Question put and agreed to.

Ordered,

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.

Bill read the First time; to be read a Second time on Friday 15 March, and to be printed (Bill 161).