Energy firms to work with Scottish Government on social tariff

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Andrew Feinberg

White House Correspondent

Energy firms are working with the Scottish Government to deliver a “social tariff” that could cut fuel bills for vulnerable customers.

Ministers are working with E.On, EDF Energy, Scottish Gas (Centrica) and consumer organisations on a new working group which aims to design the special tariff – which it is hoped could provide more affordable energy for those in need.

The move comes after the Scottish Government’s climate action minister Alasdair Allan chaired a roundtable event to consider what could be done to help those struggling with energy costs.

Mr Allan said: “The Scottish Government has repeatedly called for a social tariff for those who need it the most, including those in extreme fuel poverty.

“It’s great news therefore that the energy suppliers and consumer organisations have agreed to work with us on this.”

The minister accepted there is “some way to go” before a social tariff – which would see certain customers charged a reduced rate for their gas and electricity – becomes a reality.

He said: “This is a real step forward and could produce a model for fairer energy pricing not just in Scotland but in other nations too.”

It comes as the average household energy bill is set to increase by £149 from October after industry watchdog Ofgem confirmed it was increasing its price cap.

At the same time, the Government is withdrawing winter fuel payments from millions of pensioner households across the UK who are not in receipt of benefits.

Timescales for the Scottish Government’s new working group are to be agreed shortly but Mr Allan added: “We recognise the urgency in delivering extra support for consumers struggling with their energy bills.

“We remain committed to working closely with the UK Government, Ofgem, suppliers and consumer organisations, advocating for the delivery of a social tariff across Great Britain.”

Gillian Martin, acting Energy Secretary in the Scottish Government, wrote last year to the previous UK government, setting out the principles ministers at Holyrood think should be key features of a social energy tariff.

She made clear the Scottish Government believes such a scheme should be used to provide additional support for customers rather than acting as a replacement for existing forms of support.

Ministers at Holyrood agree any new social tariff should be applied automatically to anyone in receipt of means-tested benefits – but could also help those on low incomes who just miss out on qualifying for benefits and who are at risk of fuel poverty.

People who have high energy bills because they need to use medical life-saving equipment for long-term conditions should also be eligible for any such scheme, the Scottish Government believes.

Andrew Bartlett, chief executive of consumer body Advice Direct Scotland, which has been campaigning for a UK-wide social energy tariff, said it was “very encouraging that energy suppliers are willing to get around the table and help design a workable social tariff”.

Mr Bartlett said: “To be truly effective, struggling households should automatically be placed on the cheapest energy deal through an opt-out system, so they do not have to take any action to benefit.”

But he stressed: “The need for action is urgent, especially given that energy prices are about to increase as winter approaches, pushing millions of people into the desperate position of being unable to afford to heat their homes once again.

“We hope that this new working group can show the UK Government that an opt-out social energy tariff is both workable and essential, giving it fresh impetus to act.”

David Southgate, policy manager at the disability equality charity Scope also hailed the creation of the working group as a “positive step”.

Life costs more if you are disabled, and Scotland has some of the worst fuel poverty rates in the UK with particular challenges in rural areas.

“The devil will be in the detail, and everyone around the table in these discussions must make sure the voices of disabled people are heard.

“At the very least the Scottish Government and suppliers must work to ensure disability benefits, like Adult Disability Payment, are included in eligibility criteria.

“We hope the UK Government will use this example to do the right thing and implement a nationwide social tariff as soon as possible.”