Latest news with #WarmHomesDiscount
New Statesman
22-07-2025
- Business
- New Statesman
How Ed Miliband can deliver cheaper energy bills, today
Photo by Carl Court / Getty Images We need to get energy bills down, and fast. Above all else, how quickly we make these bills affordable is what will determine our success as a Labour government. Our work in expanding clean energy and insulating homes will get bills down for good, but these investments will take time while voters are, rightly, impatient for change. The good news is there are ways to get energy bills down now and for free. We can do this by implementing a progressive pricing system. The simplest way is to abolish the standing charge – a flat fee paid by all of us regardless of the amount of energy used. Another is through a 'Rising Block Tariff', where an initial allowance of energy has a lower unit price and energy consumed above this allowance, a higher unit price. With extra exemptions also built in, this pricing system will lead to lower bills for low- and middle-income households and doesn't cost the taxpayer a penny. Britain has some of the highest domestic energy bills in Europe and record numbers of people are struggling to pay them. The cost-of-living is still, by far, the most important issue for voters. Nine in ten people see reducing their energy bills as the best way of getting the cost-of-living down. They are right. Making the bills affordable is why I, as a Labour MP, was elected. Our Labour values can be summed up as this: ensuring that every single person in this country can afford a good life. But with one-third of people unable to afford the basics and 3 million emergency food bank parcels being handed out every year, it's clear we are very far from that ideal. If we want a country where a good life is affordable, then we must get energy bills down. Making life affordable was why over 100 MPs came together last week to form the Living Standards Coalition. We come from different traditions of the party, but we share common Labour values and the same overriding electoral imperative. Put bluntly, if we don't get bills down, we lose. Economically insecure voters are 50 per cent more likely to have left Labour. We need to get bills down fast to get these voters back and keep the likes of Nigel Farage out of power. We are building the solar farms, wind turbines, and nuclear power stations that will get bills down for good. We are insulating 5 million homes. But all of these investments take time. People need relief from rising bills now. We have acted, expanding the Warm Homes Discount, which led to an immediate fall in bills for the six million lowest income households, but we can do more to get more peoples bills falling today. There are ways to get bills down quickly and for free, by making the bills we pay more progressive. The simplest way is by abolishing the standing charge, and moving the costs on to each unit of energy consumed. The standing charge, paid by all of us regardless of the amount of energy used, has risen by 43 per cent since 2019. It is, in effect, a flat tax that hits low- and middle-income earners the hardest. Getting rid of this charge would mean that your energy bill is related to how much you use. It is progressive, puts more money into the pockets of low- and middle-income households, and is fiscally neutral. Subscribe to The New Statesman today from only £8.99 per month Subscribe Another element of a progressive energy bills system is a Rising Block Tariff. Where currently all the energy we use has a flat price, the Rising Block Tariff introduces an initial allowance of energy usage that is priced at a lower tariff. Energy used above this allowance is priced at a higher tariff. Protections are then built in for vulnerable groups such as those on means-tested social security, children, and the disabled to protect poorer, high-energy households. As income is strongly correlated with energy use, it is low- and middle-income households that benefit the most. A Rising Block Tariff is progressive, growth-enhancing, and fiscally neutral. It is progressive because it reduces costs for low- and middle-income households. It is growth-enhancing as it gets more money in the pocket of low- and middle-income families who will then spend more down the local shops and less on foreign gas imports. Crucially, this policy won't cost the Treasury a penny. It redistributes costs within the system. Too many of us are struggling to pay the bills with little relief in sight. Getting to clean energy and insulating homes will get bills down for good, but after years of hard times, people are impatient. They want us to get bills down now. There is a way to do this. By introducing a progressive pricing system, we can reduce bills for low- and average-energy users. Changing to this pricing system would also boost growth, and doesn't cost the taxpayer a penny. These are policies that live up to our Labour values and will help us win the next election. Related
Telegraph
30-06-2025
- Business
- Telegraph
Energy companies are not ripping you off
A week ago, the Government announced with great fanfare that 'millions more families' would get £150 off energy bills this winter. This sounds great. Unfortunately, what the Government failed to mention is who would pay for this. The answer is everyone else. The Warm Homes Discount (WHD) is one of several non-energy obligations placed on suppliers. Suppliers get a bad name, but they are forced to do a lot of things that have little to do with energy supply, and are given little money to do it. Meaning fewer resources to do the things people expect them to do well. Of course, some suppliers could and should do better, but it's worth thinking about the various spurious obligations they face and why they make little sense. Take the WHD. This is how it works: Step 1: the supplier must ask the Department for Work and Pensions which of its customers are eligible to receive the discount; Step 2: the supplier calculates the total cost of the discount; Step 3: the supplier adds the cost of the discount to the bills of all its customers that are not eligible to receive it, plus an admin fee. This is wealth redistribution, pure and simple. Suppliers take money from one group of customers in order to give it to another group. It is quite simply not the job of corporations to do this – if governments want to redistribute wealth, there already exists a tax-and-benefits process for this. Make no mistake, the WHD is a benefit for a small group of consumers and a tax on the rest, and with over 6 million homes expected to be eligible, the overall cost will be close to £1bn. Another non-energy obligation imposed on suppliers is the Energy Company Obligation (ECO) that requires suppliers to help their customers cut energy usage through home improvements such as better insulation. What, you may ask, do energy suppliers know about building and construction? The answer is that they have had to learn, hiring builders and other contractors to carry out home retrofits. The scheme costs over £1bn per year. And how is this paid for? Through bills. Suppliers impose a charge on their customers to pay for the scheme. Again, this is inefficient. There are already people who know about insulation and building standards. They are called local authorities and they supervise the planning and building control processes. If the government wants to reduce heat losses in homes, it should provide funding to local governments to supervise such schemes, rather than asking energy suppliers, whose job is to supply gas and electricity, to do it. Smart-meter installation is another unnecessary supplier burden. No other country in Europe expects suppliers to install network equipment. Network operators do it instead. But in the UK, suppliers are required to meet strict smart-meter installation targets, despite it being entirely voluntary for consumers to accept one or not. On top of this, successive governments have repeatedly told consumers that suppliers are greedy profiteers who cannot be trusted. And then they wonder why consumers are reluctant to allow them to install devices that could, were market rules to change, allow suppliers to restrict their energy usage, or charge them punitive amounts to use energy at various times of the day. Again, the costs – also estimated at around £1bn per year – are recovered through bills.
New Statesman
20-06-2025
- Business
- New Statesman
Ed Miliband keeps winning
Photo byIt's been a cheery couple of weeks for Ed Miliband. Despite a raft of negative briefings in the weeks prior to the spending review, Miliband's Department for Energy Security and Net Zero ended up being one of Rachel Reeves' biggest winners. Alongside the cancellation of a previously trailed cut to the Warm Homes Plan, DESNZ received a 16 per cent increase in spending power (more than any other department). And now, following a period of internal wrangling with the Number 10 and the Treasury, the former Labour leader has announced the extension of the Warm Homes Discount, a policy which offers a £150 energy bills discount to those on low incomes. Insiders tell me it is something the Energy Secretary has been working on behind the scenes for months. Energy bills – and the government's pledge to cut them by £300 before the end of the parliament – will be a key metric of Labour's success at the next election. Frustration over the slow pace of reduction, alongside fury over the Winter Fuel Payment, were big issues on the doorstep during the locals (it wasn't a good night for Labour). In the wake of voting, one insider close to Miliband pointed to the Warm Homes Discount – which was first introduced in 2011 – and questioned why the government did not make more of it following the decision to cut Winter Fuel. It is, after all, a means-tested benefit intended to support not just elderly people, but millions of households on low incomes to reduce their energy bills. The extension announced on Thursday will see a further 2.7 million households eligible to receive this benefit; over 6 million households will now be able to access the discount. It will be paid for via a deal which the government has struck with the energy regulator, Ofgem. Currently, energy bills include the socialised costs of energy companies' unpaid debts, the government has done a deal to reduce the overall debt burden on energy companies. This accompanies the recent cut to the Energy Price Cap, which comes into effect in July, meaning a double whammy of energy bill reductions. All of this suggests that despite speculation that Keir Starmer might be about to make an about-turn on support for net zero, the Prime Minister is firmly staying put. Not only has Miliband's funding been bolstered, but his department has been responsible for some of the government's most recent positive news: 100,000 new jobs at Sizewell C, solar panels for newbuild homes, schools, and hospitals, and now the extension of the Warm Homes Discount. And Starmer has made clear that, in directly taking on Nigel Farage, he won't look to ape the Reform UK's net zero scepticism but will seek to prove how the green transition can help low-income, marginalised communities, as well as slashing the UK's carbon emissions. That Starmer is staying close to Miliband is unsurprising. The PM has, after all, always been environmentally minded (he is a pescatarian, did you know?). Perhaps his most famous case as a human rights lawyer was representing two Greenpeace Activists against McDonalds in the 1997 McLibel trial. Starmer, who's former Kentish Town home is a short walk from Miliband's ends in Dartmouth Park, was also encouraged to run to be an MP in 2015 by his predecessor as Labour leader. The pair have a shared political history; it's easy to speculate that Starmer feels some loyalty there. Subscribe to The New Statesman today from only £8.99 per month Subscribe Connections aside, it's clear Starmer sees the electoral benefit of his Energy Secretary's clean power drive, particularly after the disastrous Winter Fuel Payment saga and the government's subsequent U-turn. Reducing the UK's reliance on imported natural gas and other fossil fuels will lead to lower energy bills; a result on which Starmer's premiership will be heavily judged (and to some extent, already is). And in this new turbulent international climate – the arguments for energy security remain; Miliband was the first to make them. After months of underestimation from his detractors, the Energy Secretary and his agenda are safe, for the time being. It all now rests on the success of his delivery. Related
Daily Record
19-06-2025
- Business
- Daily Record
Warm Home Discount Scheme to expand and pay six million people £150 this winter
A further 240,000 households in Scotland will receive the energy bill boost this winter. Millions of households will see their energy bills cut by £150 this winter, as the UK Government delivers another major package of support to ease the cost of living for working families through the Plan for Change. Over 6 million households will benefit this year - an increase of 2.7m households, including 900,000 more families with children and a total of 1.8m households in fuel poverty. Every billpayer on means-tested benefits will now qualify, removing restrictions that previously excluded many who needed help and providing peace of mind to millions more families. The move will see 240,000 Scottish households receive the discount for the first time this winter. The Department for Energy Security and Net Zero said the major expansion of support for working families is the latest in a raft of cost of living support made possible because the UK Government has stabilised the economy, fixed the foundations and repaired the public finances - deliberate choices which are helping provide security and more money in the pockets of working families through the Plan for Change. Prime Minister Keir Starmer said: "I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill. "Providing security and peace of mind for working people is deeply personal to me as Prime Minister and foundational for the Plan for Change. I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference." Energy Secretary Ed Miliband said: "Millions of families will get vital support with the cost of living this coming winter, demonstrating this government's commitment to put money in people's pockets through our Plan for Change." The energy price cap is also falling in July and today's announcement adds a further £150 in direct support for millions. This expansion of the Warm Homes Discount means families can plan for winter in the knowledge that they will receive support, giving them certainty and peace of mind before summer. The UK Government said it has also protected working people's payslips from higher taxes, frozen fuel duty and are increasing the minimum wage to give pay rises of up to £1,400 a year to millions of low-income workers. Pensioners across the UK with an income below £35,000 will also receive either a Winter Fuel Payment or Pension Age Winter Heating Payment this year, worth between £200 and £305. The expansion of the Warm Home Discount will be offset by new efficiency savings across the energy system. For example, Ofgem have confirmed a decrease in the operating cost allowance of the price cap for the average billpayer which will take money off bills. Ofgem's plans to reduce the overall stock of consumer debt, which is currently recouped via a levy on all bills, will also produce savings that help to fund the Warm Homes Discount. Adam Scorer, Chief Executive, National Energy Action said: "It's hugely positive that across Great Britain, many more low-income households on means-tested benefits will get some direct support to tackle unaffordable bills and record energy debts this winter. "Vitally, this includes many more low-income working-age households with children, who are living with the daily consequences of not having access to enough energy at home." The change will mean that all households where the means-tested benefit recipient (or their partner or legal appointee) is named on the energy bill will now be eligible to receive the £150 electricity bill rebate. It's important to be aware the money is paid directly to the energy supplier. The number of families who will receive the discount for the first time, broken down by region, include: Scotland: 240,000 Wales: 110,000 North East England: 100,000 North West England: 280,000 Yorkshire and the Humber: 210,000 East Midlands: 160,000 West Midlands: 270,000 East of England: 250,000 London: 570,000 South East England: 350,000 South West England: 220,000
Scottish Sun
18-06-2025
- Business
- Scottish Sun
Over 2.7million households to get free £150 cost of living cash this winter in big update
The move comes just a week after the government's Winter Fuel Allowance u-turn HELPING HAND Over 2.7million households to get free £150 cost of living cash this winter in big update Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MORE than 2.7 million households are set to benefit from a £150 cost-of-living benefit this winter. An additional 2.7 million households will now be eligible for the subsidy, which will apply to every billpayer on means-tested benefits. Sign up for Scottish Sun newsletter Sign up 3 The new measure will apply to every billpayer on means-tested benefits Credit: Getty 3 The subsidy will apply to every billpayer on means-tested benefits Credit: Getty It will take the total number of claimants to more than six million. The expansion is the latest in a series of cost-of-living measures Sir Keir Starmer hopes will placate Labour rebels furious at welfare cuts. The PM said: 'I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill. 'I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.' The new expansion to the cost-of-living measures will see 900,000 families with children and a total of 1.8 million households in fuel poverty will benefit this year. The Government has said the expansion of the Warm Homes Discount means families will be able to plan for winter knowing they will be offered support. The government has also frozen fuel duty and are increasing the minimum wage. Bill payers living in England and Wales will qualify for the discount if they receive means-tested benefits. Following Rachel Reeves' u-turn on the Winter Fuel Allowance last week everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit from a Winter Fuel Payment this year. The move comes after the chancellors disastrous attempt to axe the universal Winter Fuel Payment in July last year just weeks after entering office. Keir Starmer confirms huge winter fuel payment U-turn But fears have been raised immediately by economists that taxes will have to rise to pay for the winter fuel u-turn. The Treasury say there will be no permanent additional borrowing to pay for the move. A total of nine million pensioners are set to benefit from the payment this year. 3 Everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will benefit Credit: Getty The Government plans to offset the expansion of the Warm Homes Discount with new efficiency savings across the energy system. Energy Secretary Ed Miliband said: 'Millions of families will get vital support with the cost of living this coming winter, demonstrating this government's commitment to put money in people's pockets through our Plan for Change." Part of the Plan for Change, the government hopes the expansion of the Warm Homes Discount will help to combat the cost-of-living crisis and directly benefit working families. The Government has estimated that 100,000 families in North East England, 280,000 in north West England and 270,000 in the West Midlands will receive the benefit for the first time. Meanwhile 110,000 families in Wales and 240,000 in Scotland will receive it this winter for the first time.
