The move is part of the regulator's new guidelines on the types of initiatives that energy suppliers can include towards the social spending commitments agreed with Government. Following the 2008 Budget, suppliers agreed to increase their collective expenditure on their social programmes by £225 million between 2008 and 2011.
Ofgem's new guidelines provide more clarity and certainty on what will be counted towards this increased social expenditure and they set a tighter definition for social tariffs. The regulator has specified that in future, for a supplier's social tariff to count as such against their spend commitments it must be as good as the lowest tariff they offer to customers in that area, including online deals. This means that vulnerable and fuel poor customers who struggle most to pay their energy bills will be assured of being on the best deal their supplier offers in their area.
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Ofgem's Managing Director for Corporate Affairs, Sarah Harrison, said: "Tightening the definition of a social tariff assures eligible customers that they will be on their supplier's best tariff in their area. This move also gives consumer advisers more confidence to recommend social tariffs.
"Ofgem's guidelines allow for different ways to use the increase in suppliers social spend to help customers most in need. The range of initiatives will help in the challenge to target support effectively so that the £225 million can contribute to tackling fuel poverty."
(CD/JM)
