Supporters of the Rowntree proposal, including Fahnbulleh, argue this criticism misses an important distinction.
Rather than a conventional rising block tariff that simply charges heavy users more, Rowntree’s proposal would provide every household with discounted energy for essential use using government subsidies.
The allowance would vary according to household size, with additional support for lower-income families and those with greater needs.
The think tank estimates a typical middle-income household could save around £225 a year under the proposal.
The biggest unanswered question, however, is how it would be funded.
Such a cut in energy bills, which would also hand the richest households a £179 reduction in their bills, would cost almost £7bn to implement, according to Rowntree’s own calculations.
It has suggested paying for the policy through higher levies on wealth, landlords and entrepreneurs, raising immediate questions about whether the plan would ultimately require significant tax increases.
Burden on struggling households
Funding is only one concern. Energy use does not always align neatly with household income.
Alex Belsham-Harris, at the Citizens Advice Bureau, argues the households struggling most often have both low incomes and unusually high energy needs.
“Under this type of scheme, they would receive less support than people with lower energy use, even if those lower-energy households are better off financially,” he says.
There are an estimated 2.4 million households, almost one in 10, whose energy costs are deemed by the Government to be too high.
Many of these households also use prepayment meters.
Official figures show 18pc of households using prepayment electricity meters struggle to afford their bills, compared with 8pc paying by direct debit.
