Fairer, Warmer, Cheaper: The New Energy Bill Support Policies
In this era of high energy prices, we strive to help consumers stay afloat. To uncover the best response to the rising energy prices and how best we can assist families in desperation, Citizens Advice published a new report on the need for a long-term solution.
The report was produced alongside the independent academics and experts of the Social Market Foundation and Public First and has the support of consumer (Martin Lewis) and industry groups (Energy UK).
It will come as no surprise that they concluded the current system is inadequate.
Their report argues for a ‘social tariff arrangement’ consisting of targeted financial support towards households who spend an excessive proportion of their income on energy bills. This allows space for these households to financially recover, thereby strengthening our communities and the economy as a whole.
They believe that eligibility for this social tariff should be determined by the state and initiated without the need for application or participation from these households. This keeps this support accessible and free from the shackles of bureaucracy and a lack of public awareness that keeps large numbers of the public from receiving benefits that they are entitled to.
Eligibility for this tariff should be based on household income and energy consumption. If a household is already receiving means-tested benefits this should be considered a qualifying factor for receiving the social tariff, however, this should not be the only factor considered. This will allow for the large numbers of low-income households who are not receiving benefits to still be in line to receive this support.
They recommend that this social tariff take the form of a lump sum payment which will vary depending on the household’s income and energy consumption. They consider this to be the most progressive and fiscally efficient form of support.
They speculate:
“Drawing on our analysis of bills, incomes, public opinion and stakeholder views, we suggest that where annual bills are in the region of £3,000, the social tariff should deliver support of around £900 to the typical eligible household.”
The report states that funding behind the social tariff should come from general taxation rather than levies taken from energy bills. This should not be considered an energy policy but a social policy and should therefore be funded by the state.
