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Protect Pensioners, Not Profits

Energy companies are set to extract an extra £1.5 billion from the public this year, more than enough to restore Winter Fuel Payments. The choice is simple: protect corporate profits or keep pensioners warm this winter.

Cuts to the Winter Fuel Allowance will leave millions of pensioners cold while energy companies profit. (Koldunov / Getty Images)

As I write this, Putin is bombing Ukraine’s energy infrastructure, and the price of crude oil has gone up three percent. Both are good reasons for the UK to make the move to homegrown renewables — something the last government ignored, and Labour has rightly put front and centre of its energy policy with the launch of GB Energy. The price of this transition, however, cannot be the poorest and most vulnerable in our society footing the bill.

Many were shocked by Rachel Reeves’ recent move to scrap the universal Winter Fuel Payment, which previously enabled pensioners in England and Wales not on pension credit or other means-tested benefits to access fuel payments worth between £100 and £300. Around five million pensioners will suffer as a result.

If that wasn’t enough, the move was followed by a spate of further disastrous headlines. It was revealed that hundreds of thousands of pensioners could miss out on getting Winter Fuel Payments before the cold weather hits due to a nine-week delay in processing Pensions Credit applications. The energy price cap, which limits the maximum amount energy suppliers can charge households for each unit of gas or electricity they use, then went up by 10 percent, and it now looks like there has been no assessment of the impact of scrapping the payment on pensioners.

As became painfully clear in the Prime Minister’s Rose Garden speech, there has also been no consideration of the impact on the NHS of more older people living in cold, damp homes. The health consequences of these living conditions are particularly harsh on those older people with a disability, long-term health conditions, or poor mental health. It results in more pressure on an already overstretched NHS and, in some cases, can result in additional winter deaths.

The Price Cap increase, meanwhile, is bad news for all, with the average household’s annual energy bill set to increase by 10 percent from 1 October to £1,717. This represents a 65 percent increase in prices before the energy bills crisis started. For older people who had previously received the Winter Fuel Payment, this equates to a staggering increase of 131 percent on winter 2020/21. It will make some pensioners’ real-terms energy bills higher this winter than at any other time. In fact, they will be £500 worse off.

Scrapping the Winter Fuel Payment might have made sense to the Treasury, but the arguments against it have come in thick, fast, and furious. Campaign groups have raised the alarm about the loss of payments to pensioners who are on very low incomes, live in energy-inefficient homes, or are seriously unwell and need to keep the thermostat high, but who are not entitled to Pension Credit. Research in a poll by YouGov for the Energy and Climate Intelligence Unit (ECIU) found that, of the two-thirds of people who were aware of the move to restrict winter fuel payments from pensioners, an outright majority opposed it.

In all this chaos, the far right has seen an opportunity to swoop in on the issue and blame it on net zero. Let’s be clear: this has nothing to do with net zero. In fact, we at the End Fuel Poverty Coalition back the government’s longer-term plans to bring down energy bills via cheaper, UK-owned renewable energy and a Warm Homes Plan to insulate people’s homes and move them to more efficient heating systems. One way of countering the far right is giving the public a clear timetable for when the very real benefits of these measures will kick in.

This long-term focus, however, doesn’t mitigate the threat of the winter coming. In the short term, the government must also act urgently to restore the Winter Fuel Payment to more pensioners, end energy debt through a help-to-repay scheme, and expand the Warm Home Discount programme. Keir Stamer and Rachel Reeves should also extend the Housing Support Fund to provide emergency grants to those in hardship and crisis.

When it comes to questions of funding, the government should look at the profits of the energy industry, which have some of the ‘broadest shoulders’ of all. Our energy profit tracker reveals the industry has made more than £427 billion in profits since 2020. Ofgem’s latest cap increase will add up to almost £1.5 billion — enough to cover the whole Winter Fuel Payment universal benefit.

It’s clear there is money in the system. The problem is that it’s going to energy bosses and their shareholders when it needs to go to ordinary people. In the face of such limited movement from the government, it comes down to the people to take action. The Winter Fuel Payments were saved in 2023 from a Tory attack by collective pressure: that’s exactly what’s needed again.