Energy firms could get welfare details on people with state benefits
Details of people on state benefits could be handed to energy firms so they can give them special rates.
The plan, under consideration by the government, is intended as a new approach to help people who are struggling to pay their energy bills.
It would allow power companies to transfer customers to a special tariff set by the regulator, Ofgem. Energy Secretary Greg Clark said the proposal would help vulnerable consumers.
The Department for Business, Energy and Industrial Strategy (BEIS) said data-sharing would take place under strictly controlled conditions and only with customers’ consent.
BEIS said it would open consultation on the proposals on Monday, as it would require a change in the law to allow the necessary data-sharing.
The tariff in question is known as the safeguard tariff cap and was introduced in April last year. It already covers five million people, mainly those on pre-payment meters.
Under the plans, customers receiving specific state benefits would be identified and automatically moved to the safeguard tariff.
Mr Clark said: “The effects of energy price rises are often felt most by those on the lowest incomes, as they are usually on the highest standard variable tariffs.
“These people are at risk of being plunged further into fuel poverty if they are left at the mercy of a broken energy market.
“Enabling energy suppliers to establish who should be on Ofgem’s safeguard tariff cap will help these vulnerable consumers.”
Last week, Ofgem said the savings for people on the safeguard tariff would be reduced from April, but added that it was not designed to be the cheapest tariff on the market.