A SOCIAL energy tariff could cut annual bills by up to £559 for two-thirds of households, unions said.

The TUC released new analysis of official statistics on energy bills ahead of a £221 average rise when the new price cap kicks in today.

It shows that average annual bill payments are £437 higher compared to May 2021, costing households a total of close to almost £2,500 in the time since.

TUC general secretary Paul Nowak said: “Today’s change in the energy price cap is a clear example of how Trump’s warmongering is hitting British families — from today, households will start to feel the pain of rising bills. 

“That’s why we are calling for a social tariff which will cut bills for up to two thirds of households — those that need it most — and retain the price cap for everyone else, except the extremely wealthy minority with huge estates.

“This common-sense approach would help protect living standards, stop punishing price rises for households and bring down inflation. It should be paid for by an increase in the windfall tax on banks who have made eye-watering profits.”

The union federation urged ministers to fund a permanent social tariff, which incrementally reduces energy bills to all those on low and middle incomes, with a windfall banking tax.

Alongside targeted boosts during acute energy cost crises, this could save the lowest-income households up to £559 a year — 30 per cent of their energy bills, it said.

The TUC’s analysis, drawing on Bank of England judgments about the impact of the government’s recent energy bill package, also estimates that the standard social tariff could reduce CPI inflation by around 0.3 percentage points and the emergency tariff by around 0.4 percentage points.

End Fuel Poverty Coalition co-ordinator Simon Francis said: “If it is to be Andy Burnham’s vision of a rewired Britain, then the new PM must also rewire how energy bills are set: devolving control of energy will count for nothing unless it comes with a permanent social tariff, an end to energy debt, and a credible plan to break the link between gas and electricity prices.”

Campaigners are also calling for the next PM to fast-track the electrification of Britain to end its reliance on volatile fossil fuel prices.