The SNP’s focus on social energy tariffs is welcome, but it will take more than this to cut bills
- Written by Karen Turner, Professor and Director of the Centre for Energy Policy, University of Strathclyde
The Scottish National Party manifesto[1] includes a promise that their MPs will call for a statutory social tariff for energy[2] (and other utilities). This focus on social tariffs in public debate is welcome, but it needs to form part of a wider package of reforms[3].
Help with energy bills, which are likely to remain high into the next decade[4], and addressing the persistent challenge of fuel poverty[5] needs to be coupled with action on energy efficiency, income support and energy market reform.
Politicians should also consider who pays for these interventions, as well as how and when they do so. This is important to ensure that the burden of costs does not fall on those least able to pay, including within (and on the margins of) the community not eligible for any social tariff.
The conversation about social tariffs for energy is not a new one. Campaigners and charities have promoted the idea for some time[6]. The Conservative government has engaged in the conversation, but without turning those words into action[7].
The SNP has now put the issue back on the political agenda. In the run up to its manifesto launch, party leader John Swinney proposed[8] a social tariff on energy bills targeted at older people, those on low incomes and people with disabilities, which he claims could halve some people’s bills.
The party has said the initiative – which they cost at just under £8 billion[9] in the current year – could be funded through a combination of general taxation and “top slicing” energy companies’ profits.
Other parties have set out different approaches to reducing energy bills, such as Labour’s plans for a new, publicly owned clean energy company called Great British Energy[10] and Conservative pledges to reform standing charges[11] (which are charged to everyone, irrespective of energy usage, with regional variation in the level). The Liberal Democrats further wish to provide free heat pumps[12] for those on low incomes and the Greens want to insulate homes to EPC B standard[13] (meaning they’re classed as “highly efficient”).
The country will need a combination of these types of measures to ensure affordable and sustainable energy, not least until energy prices ease[14] considerably.
At the beginning of this year, Ofgem launched a review of standing charges[15] . The SNP manifesto proposes that these are significantly cut for all[16] and removed for those on prepayment meters.
Regardless of party politics, Ofgem’s review must be completed and the recommendations implemented. Wider energy market reform[17] is also vital, including decoupling the price of electricity from gas to reflect cheaper renewable energy in consumer bills.
References
- ^ manifesto (www.snp.org)
- ^ social tariff for energy (s3-eu-west-2.amazonaws.com)
- ^ reforms (theconversation.com)
- ^ next decade (www.energylivenews.com)
- ^ fuel poverty (www.nea.org.uk)
- ^ for some time (www.nea.org.uk)
- ^ words into action (www.theguardian.com)
- ^ proposed (www.bbc.co.uk)
- ^ just under £8 billion (www.bbc.co.uk)
- ^ Great British Energy (labour.org.uk)
- ^ reform standing charges (public.conservatives.com)
- ^ free heat pumps (www.libdems.org.uk)
- ^ EPC B standard (greenparty.org.uk)
- ^ energy prices ease (www.cornwall-insight.com)
- ^ review of standing charges (www.ofgem.gov.uk)
- ^ cut for all (s3-eu-west-2.amazonaws.com)
- ^ energy market reform (theconversation.com)
- ^ election newsletter (theconversation.com)
- ^ our research (strathprints.strath.ac.uk)
- ^ more fundamental challenge (www.strath.ac.uk)
- ^ in poverty (www.jrf.org.uk)
- ^ Our research (strathprints.strath.ac.uk)
- ^ pay the costs (strathprints.strath.ac.uk)
- ^ higher-earning workers (theconversation.com)
- ^ also a danger (theconversation.com)
- ^ nine in ten (www.citizensadvice.org.uk)
