It comes as the average household energy bill is set to rise by £149 from October 1 after industry watchdog Ofgem increased its price cap

Households across Britain are facing increasing energy costs this winter

By Lawrence Matheson

The chief of Ovo Energy has urged for a major overhaul to the UK’s energy bills system, suggesting they should be subsidised for less affluent households as consumers brace for another surge in fuel costs this winter.

Chief executive David Buttress said that the Government should implement a social tariff, a concept already utilised in the telecoms industry to assist those on benefits like Universal Credit with their broadband bills. This measure, which has been proposed by campaign groups for several years, would likely manifest as a targeted discount energy deal for poorer customers, potentially below the price of the cheapest standard energy tariff available.

Mr Buttress stated:

A social tariff would allow us to address the cost of energy for the poorest in our communities in a way that means, collectively, we could give them the protection they need to get through the winter months.

This comes as the average household energy bill is set to increase by £149 from October 1 after industry watchdog Ofgem raised its price cap. Ovo, currently the fourth-largest domestic electricity provider in the UK, recently unveiled a new £50m energy bills support scheme for the winter months.

However, Mr Buttress suggested that Labour should aim to “get away from the short-term tactics” of addressing high energy bills via annual handouts. Ministers queried firms about long-term market reforms for energy bills including a social tariff at a roundtable in late August, which Ovo attended.

Mr. Buttress said that the Government should adopt a pragmatic approach and explore the most efficient means of funding, whether through increased energy bills for all or general taxation. This development coincides with ongoing criticism of the Government’s plan to limit winter fuel payments to Pension Credit recipients, a move that will leave approximately 10 million individuals without this benefit this winter.

Historically, around 11.5 million people received this assistance. Commenting on the policy, Mr. Buttress said: “You have to look at it in the round. The Government has come in and had to take a view of the various different mechanisms and schemes, as well as the new Budget at the end of October.”

We must have a grown-up conversation about how we protect the most vulnerable… A social tariff will protect all those that need that extra help with the cost of energy, not just one group or another.

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