Nils Pratley thinks that the secretary of state, Miatta Fahnbulleh, should “keep things simple” and develop a targeted social tariff to protect vulnerable households from surging energy bills (The UK energy secretary is flirting with a bad idea for bills – the ‘rising block tariff, 14 October). Unfortunately, there is nothing simple about such a scheme.
Pratley’s proposal would mean creating a new benefits system inside our privatised energy industry. If the interminable debates about our current benefits system were not enough to put him off, we can look to the failing social care system to see where it might lead. Andy Burnham has made it his life’s mission to dismantle this lottery that can strip pensioners of their savings and the family home. Just as he now plans a universal public provision of adult social care, we at the New Economics Foundation have such a plan for energy.
Every household should be able to afford the energy essentials: enough warmth to survive a winter; enough electricity to switch on the lights and run a fridge. We should recognise this as a universal right rather than waste time tinkering with a targeting system that arbitrarily separates the “worthy” from the “unworthy” (the “rough justice” of the Resolution Foundation’s proposal, which penalises households based on the income of the highest earner, is a case in point).
The long-term design of a universal offer can be debated. But as another energy crisis bears down on us, we should keep it simple: have the Treasury fund a true price cap on an essential block of electricity and gas. This would be a policy from which everyone wins (especially if electrically heated homes are allowed to transfer across their gas allowance).
In the longer term, one way to help pay for this could be to charge households with very high energy consumption more. But there are other ways. The Australian “solar sharer” scheme gives every household three hours of free electricity in the middle of the day, bringing hope that renewables could soon give true energy security.
Dr Alex Chapman
Head of economic and environmental policy, New Economics Foundation
