Three quarters of the public support an Affordable Energy Guarantee as price cap sends bills soaring again

With average annual energy bills set to increase by £221 from Wednesday 1 July, a new policy from JRF would give all consumers a portion of cheaper energy, providing savings across the income spectrum with households in the lowest third of incomes saving on average  over a month’s worth of energy on their annual bill.

Polling from More in Common showed that 75% of respondents backed JRF's Affordable Energy Guarantee (AEG) policy over a range of other policy options available to the Government.

The policy would offer a unit rate discount on energy beneath a threshold of 50% of typical consumption, based on Ofgem domestic consumption values. Any energy consumed above that threshold would be charged at the current market rate, and households with additional energy needs would receive a variety of ‘top-ups’.

• Households with children would receive additional equal increments for every child.
• Households in receipt of means tested or disability benefits would receive the discounted unit rate on all their energy consumption.

The polling took in responses from over 2,000 people, presenting different policy interventions the Government could make in response to the Iran war to help consumers with their energy costs.

The AEG came out as the most popular choice in a list that included increasing the value of the Warm Homes Discount for eligible households, direct cash transfers, fixing long-term prices with renewable energy generators and a one-off cancellation of energy debt for all households.

With today's increase to the energy price cap, our analysis also calculates the savings different household types would make were the AEG to be adopted:

• households in the lowest third of incomes would save £196 on their annual energy bill
• single parent households in the lowest third of incomes would save £247 on average
• couples with children in the lowest third of incomes would save £253 a year
• households where someone has a long-term physical or mental health condition that limits activity in the lowest third of incomes would save over £222 a year.

It comes as JRF launches the AEG policy as a structural intervention to address the UK's high energy prices, providing savings across the income spectrum and giving the largest benefit for those on the lowest third of incomes.

Average annual savings for households in this group are equivalent to six weeks’ worth of energy costs at the new price cap's levels.

Further polling conducted by More in Common also found that lack of government action was the most common cost-of-living factor that was causing voters not to vote for Labour at the local elections, with nearly three quarters (72%) of respondents citing this as the top reason.

A separate survey question found that 71% of respondents were either extremely or quite worried about the impact the US-Israel war on Iran would have on their energy bills this winter.

JRF'S Senior Policy Adviser, Tilly Cook said:

"Today's increase in the energy price cap will only place further pressure on household budgets across the UK as they see their bills climbing once again.

"Energy is an essential service. The government should redesign  our current dysfunctional system to provide a basic portion of cheaper energy to all households. This would allow everyone to afford their bills and protect us from shocks like the US-Israel war on Iran.

"The polling More in Common have conducted shows that an Affordable Energy Guarantee is a popular option, and our analysis demonstrates that it is feasible, helping to provide cost stability today while smoothing the path for cheaper, renewable energy in the future."