The government could introduce an energy social tariff through the backdoor under existing powers, a fuel poverty campaigner has revealed.
Simon Francis, co-ordinator at the End Fuel Poverty Coalition, told MPs on the House of Commons’ energy security and net zero select committee that it is disappointing that the government has not yet fulfilled its commitment to consult on the introduction of a social tariff for vulnerable customers.
But giving evidence to the recently established committee, he said hard up consumers could be helped this winter by using legislative powers to set up the Energy Price Guarantee, which capped all household bills at £2,500 per annum last winter.
Francis said: “Under the Energy Price Guarantee legislation, the government can alter unit costs and standing charge costs for any particular group of customer.”
Pointing out that this mechanism was already being used to equalise the unit costs for pre-payment meter customers and those on standard contracts, he added: “We could extend that to a social tariff by almost by the backdoor to get that onto people’s bills this winter by altering the Energy Price Guarantee.”
And Francis told the committee that civil servants had admitted at a meeting earlier this week with fellow campaigners at National Energy Action (NEA) that going down this route is “possible and they can target groups of people as long as they know who they are”.
Citing figures showing that the number of deaths last winter caused by living in cold damp homes had increased by a third to 4,706, he said it was not acceptable that poorer households should be pinning their hopes on mild weather over the next six months.
Francis was one of a succession of advice charities and campaigners to warn that low-income households will find it more difficult to cope with energy bills this winter due to withdrawal of government bills support and accumulated debts.
Adam Scorer, chief executive of NEA, said new analysis by the charity showed that £440 million earmarked to support vulnerable households last winter was underspent due to the poor delivery of schemes including the Energy Bills Support Scheme.
He said: “A million households who were due for support from the different bill mechanisms didn’t get it and £440 million went back to the Treasury that should have gone into people’s pockets. As a minimum, that money should be reinvested into directly reducing energy bills for vulnerable people this winter.”
He added: “Despite the huge support the government put in last winter, the crisis will be worse this winter. Whether they like it or not, government will have to come forward with a package of support to reduce energy bills for the most vulnerable this year. The level of energy debt is also so extreme now, and is destroying so many lives, we must have a ‘help to repay scheme’ that helps people accelerate their way out of energy debt.
“We can’t get back on an even keel in the energy market without tackling the 70% increase in energy debt from 2020 to 2023. We also need longer-term mechanisms; the government must meet its commitment to consult on a social tariff and other mechanisms to bring prices down for vulnerable households to pre- crisis levels.”
Scorer also told the committee that it is “obscene” that prepayment (PPM) households are still stuck on traditional meters and have not been switched to smart devices.
Arguing that smart PPMs would enable companies to be more responsive, supportive and better able to understand when consumers are in “jeopardy”, he said: “It is obscene that we have these archaic bits of ironmongery on people’s walls and make them traipse down to shop to charge them. It’s an abomination in this market and makes people in the worst situation much worse.”
At the same meeting, Centrica group executive Chris O’Shea defended the company’s recent bumper profits.
Pressed on whether the British Gas owner would comply with Ofgem’s recent request to extend call centre opening hours during the evenings and weekends, he said that such a move was being considered as part of the company’s annual negotiations with its trade unions.
Both Rachel Fletcher, director of regulation and economics at Octopus Energy, and Chris Norbury, chief executive at E.ON, said extended hours were “under review”.
Roni Marsh, money and cost of living team manager at South West London Law Centres, told the committee that suppliers should set up dedicated telephone phone hotlines for advice agencies so they could get through more quickly on their clients’ behalf.