Energy retailers can still target bill support to those who need it most this winter but time is running out for government to share the necessary data.
Josè Davila, director of strategy, regulation and transformation at Eon UK, called on the government to wake up to the urgent need to prepare now for winter affordability challenges, stressing that further support is “desperately needed”. The first step to providing this help is for government to open data on the most vulnerable customers, he insisted.
Speaking in support of Utility Week’s Action on Bills campaign, Davila also tackled the perception that a social tariff could be funded by a levy across energy bills, saying the approach is “simply not going to work in the short term”.
Action on Bills calls on government to engage meaningfully on targeted energy bills support ahead of winter and commit fresh funding to help the most vulnerable.
Davila said: “We’re still looking at a forecast of £2,000-plus for the foreseeable future. Had we not had an intervening period where it would have been double that without government support, everyone would be running around like this sky was falling in.”
He acknowledged that over the most recent winter customers had “held up better than we thought they would” but pointed out significant caveats, adding: “One is we don’t know what damage that’s done to people’s savings and how much of that resource went into paying off bills. The other is that Europe had its second warmest winter ever just gone so do we really want to be basing policy on a bet that next winter will be the same?
“The reality is that bills next winter will still be double what they would have been in what you might call normal times, so we think customers will really need further protection.”
Davila said targeted support was still possible in 2023 but warned “if we leave it much later, then it gets to a point where you’re timed out”.
He pointed out that government already has the legal powers to share data on benefits claimants with energy retailers for the purposes of providing further support, as happens currently with Warm Home Discount.
“If they can do that and if we start working on it now, then something targeted could be possible next winter but time is running out,” he said. “The delivery mechanism would need to be simple but it’s possible if we start now.”
Action on Bills urges government to acknowledge that it will need to pledge fresh funding for energy bills support while the price cap remains at an inflated level. However, Davila suggested this message has yet to permeate Whitehall.
“The government appears to be quite attached at the moment to the idea of no taxpayer funding for a social tariff and it being all about transferring money between customers. I appreciate that’s what happens in water but you’re talking about a much smaller bill. There’s a real limit to how much support you can provide through cross subsidisation when you’ve got bills at current levels.
“That’s the message we have to convey to government and stakeholders more widely. Energy bills of £2,000 over a prolonged period is unsustainable for a significant part of the population. And tackling that by putting up the bills of other people is simply not going to work in the short term.”