Social tariffs and the cost of living

Think tank: Social Market Foundation

Author(s): Sam Robinson; John Asthana Gibson

August 17, 2023

This report from UK think tank the Social Market Foundation assesses the case for social tariffs as a mechanism to ensure access to essentials.

As the cost of living crisis intensifies, there are growing concerns that the market is unable to provide affordable access to essential goods and services. This SMF interim report investigates the depths of the affordability crisis and the case for social tariffs – discounts on products sold in free markets granted to disadvantaged consumers – as a means of helping those most in need. The interim report finds that the ‘Martin Lewis effect’ – using consumer information to get better deals – has its limits. Some 80% of people reported shopping around for food and groceries but around 1 in 6 found it difficult, and those on lower incomes were more likely to say that they almost never found better prices when shopping around. Although shopping around can help people find better deals, many are still struggling in spite of this. 28% found it difficult to afford essentials, while 29% of those ‘struggling financially’ reported spending over 80% of their income after housing costs on essentials. The public do not believe there is enough support for struggling households, but 59% support social tariffs, with only 12% opposed. However, problems preventing the existing offering of social tariffs living up to their potential include a lack of awareness and the difficulty of accessing social tariffs despite being eligible: The final stage of this project – commissioned by Citizens Advice – will build on this analysis to design a coherent policy framework to help households to afford their essentials during the crisis and beyond.