The targeted support the government has promised once the Energy Price Guarantee expires in April must go further in helping the poorest households to pay their energy bills than existing measures, a senior figure at National Energy Action (NEA) has argued.
Matt Copeland, head of policy and public affairs at the charity, was speaking following the news that the guarantee will be brought to end 18 months earlier than originally planned.
While industry commentators have welcomed the prospect of more targeted support, concerns have been raised over the “huge uncertainty” households now face until fresh measures are announced.
Outlining his thoughts to Utility Week, Copeland said poorer customers already needed support which goes beyond the current £2,500 cap on unit rates and the Energy Bills Support Scheme.
“A lot of our clients couldn’t afford energy when it was £1,000 a year, so they can’t afford for that to be doubled. So whatever they do post April, if it’s targeted at them, it needs to give more support than is currently given this winter,” he said.
Copeland said the charity believes the quickest way to help the poorest in the months to April is to give them income supplements such as further cost-of-living payments.
Once the price guarantee expires, the NEA wants to see a much lower price guarantee in place for the poorest households, alongside uprated benefits and more movement on energy efficiency. Copeland also suggested giving either a big discount on or reducing standing charges to zero for low-income and vulnerable households.
He added: “We’re saying that anything that’s announced from April should last for 18 months to cover the whole period that the initial EPG was meant to last for. That gets you to October 2024 and at that point, the government should be consulting on what next in terms of what does a social tariff look like; a mandatory social tariff in the energy sector?”
NEA is still calculating exactly who should get further help and how deep the support should be, but Copeland said the charity believes that even if the government offered further protection to up to half of households it would still make a “huge saving” overall.
It comes as a recent YouGov poll revealed a majority of adults in Great Britain (67%) believe the government’s proposals to help with energy bills are not enough.
Among those surveyed Labour voters were most likely to say the support was too little (82%), followed by Liberal Democrats (66%) and Conservative voters (55%).
The split between remain and leave voters meanwhile was 74% and 61% respectively.
With a deadline of next April to put support in place some industry commentators believe the best way to achieve this is to use existing mechanisms, rather than devising a whole new system.
Adam Bell, former head of energy strategy at the Department for Business, Energy and Industrial Strategy and current head of policy at the consultancy Stonehaven, believes that a mix of uprated benefits with income-proportionate winter tax rebates for everyone else is the best way forward.
He added: “The chancellor has committed to doing this by April next year. That’s six months. That’s no time at all in Whitehall.
“That just gives you very, very little time to produce anything more complicated. You have to use your existing systems, otherwise you won’t have a chance of making this happen.”
Yet there is concern from some that there is no obvious solution to the crisis and that the government may even have to extend the EPG beyond April until it finds the right method.
Andy Manning, principal economic regulation specialist at Citizens Advice, told Utility Week he agreed that using existing mechanisms would be the only way to deliver a targeted regime in time for next April.
However, he added: “It’s not obvious at all though that the existing mechanisms will provide the correct solution.
“We’ve been round this loop before. Before the EPG people were considering what support could look like and how you could target it. If there was an obvious solution out of an existing mechanism, it’s fair to say we would already be trying it. The reason why the EPG was introduced is because there wasn’t an obvious way to target support.
“There are existing methods to do some targeting, but none of them are perfect. It will take time to design a solution that doesn’t come with big risks.”
Manning suggested it may therefore be sensible to extend the EPG.
“It’s also important to look at people struggling the most with energy bills. Suppliers can identify customers in receipt of benefits using the existing Warm Home Discount process, so we can ensure the right support reaches them,” he added.