Keir Starmer and Rachel Reeves are facing fresh pressure over the decision to alter the winter fuel payment for pensioners as a Labour MP warned it could leave vulnerable old people in hospital.
Around 10 million over 65s are set to lose out on the £250 payment as the new Government restricts the benefit to only those receiving pension credit.
The move was announced last month by the Chancellor as part of a package of measures designed to tackle a £22 billion ‘black hole’ in this year’s budget.
But following Ofgem’s announcement on Friday that the energy price cap would rise by 10 per cent from October, there were calls for a U-turn.
Labour backbencher Rachael Maskell, chairwoman of the all-party parliamentary group (APPG) on ageing and older people, told the BBC the decision would leave many pensioners to decide ‘whether to put their heating on this winter’.
We need to make sure we protect the old and the frail … people could end up ill or in the NHS if we don’t get this right,’ she told the Today programme.
‘We have got to protect the most vulnerable people in our society and therefore I am deeply concerned that some of that protection is being removed through the ending of the universal benefit of the winter fuel payment.’
Around 10 million over 65s are set to lose out on the £250 payment as the new Government restricts the benefit to only those receiving pension credit.
Labour backbencher Rachael Maskell, chairwoman of the all-party parliamentary group (APPG) on ageing and older people, told the BBC the decision would leave many pensioners to decide ‘whether to put their heating on this winter’.
Regulator Ofcom today announced it is hiking its price cap from the current £1,568 for a typical household in England, Scotland and Wales to £1,717, adding around £12 a month to an average bill.
However, it is around £117 cheaper than the cap in October last year, which was set at £1,834.
The price cap sets a maximum price that energy suppliers can charge consumers in England, Scotland and Wales for each kilowatt hour (kWh) of energy they use.
While the cap does not limit a household’s total bills, increasing it could see people going into the colder months facing higher bills than they have had since earlier in the year.
Both the Conservatives and the Greens have also called for winter fuel payments to be made available to all pensioners this winter following Ofgem’s announcement.
Shadow energy secretary Claire Coutinho said: ‘Because they weren’t honest about their plans, that means millions of pensioners will have made no plans to deal with higher energy bills this winter.’
And Caroline Abrahams, charity director at Age UK, said restricting the winter fuel payment to those on pension credit was ‘reckless and wrong’ and ‘spells disaster for pensioners on low and modest incomes’.
She said: ‘This latest bad news about the energy price cap rising quite significantly makes it even more obvious that means testing (winter fuel payments) with virtually no notice and with no protections to safeguard vulnerable groups was the wrong policy choice and one that is potentially hazardous for some older people.’
Means testing the winter fuel payment is expected to save the Government £1.4 billion this year, which Labour said was necessary to make up the gap between the previous government’s spending plans and the money that was made available to fund them.
Labour has also criticised the previous government for failing to invest in energy efficiency and renewable power.
Ofgem has increased its price cap rise to £1717, up £149 from the current level of £1,568
A party spokesperson said: ‘This price increase is the harvest of 14 years of Tory neglect and failure to prepare and invest in British-owned clean energy.
‘While they were quick to blame everybody but themselves during the energy crisis, the Tories dragged their feet on energy security and took a hammer to the renewable energy sector, with working families still paying the price.’
The Government also insisted that more than one million pensioners would still receive the winter fuel payment and urged any pensioner worried about the impact of higher bills to check if they are eligible for pension credit.
Other charities and campaign groups have suggested different measures to mitigate the impact of rising energy bills, with Citizens Advice calling for ‘targeted bill support’ and the End Fuel Poverty Coalition urging the expansion of other support funds and a reduction in standing charges.
The coalition’s Simon Francis also criticised Ofgem’s decision to increase the amount of profit energy suppliers could make by 11 per cent, saying it added ‘insult to injury’.
He said: ‘Add to this that every month we hear about more massive profits for firms in the wider energy industry. It’s time to tax these firms fairly – not just the fossil fuel producers – and use the money to keep people warm now and in the long term.’
Ofgem said rising prices in the international energy market, due to heightened political tensions and extreme weather events, was the main driver behind the decision.
‘Ultimately the price rise we are announcing today is driven by our reliance on a volatile global gas market that is too easily influenced by unforeseen international events and the actions of aggressive states,’ CEO Jonathan Brearley said.
‘We know that this rise in the price cap is going to be extremely difficult for many households.
‘Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.’
He also urged consumers to ‘shop around’ and consider opting for a fixed-rate tariff that could save people money.
