Pensioners face another blow as Sir Keir Starmer considers downgrading plans to cut fuel bills by insulating millions of homes. Ministers are looking at ways to cut the cost of a promised £6.6 billion scheme designed to help people on lower incomes stay warm. It comes after fuel bills soared and millions of pensioners lost their right to winter fuel payments.
The Warm Home Plan set out in Labour’s general election manifesto last year included “an extra £6.6 billion over the next parliament, doubling the existing planned government investment, to upgrade five million homes to cut bills for families”. It said the money would be spent on insulation and other improvements such as solar panels, batteries and low carbon heating to cut bills.
But the Treasury is refusing to confirm whether the pledge still stands and Whitehall officials said ministers are looking at whether it is possible to trim the scheme as part of a review of all Government spending, the Financial Times reports.
Chancellor Rachel Reeves has ordered every department to find ways to save money and will conclude her review in early June.
The promise was to spend £6.6 billion before the next election. A Treasury source told the Financial Times: “We don’t comment on speculation. At the Autumn Budget we allocated £3.4bn for our commitment to the Warm Homes Plan.”
It follows the Government’s decision to means-test winter fuel payments so that they are now only available to people with the lowest incomes.
Single people with an annual income above £11,344, or couples with a combined income of £17,314, are now considered too wealthy to need the payments, although there can be exceptions for carers or people with severe disabilities. In addition, around 700,000 people entitled to Pension Credit do not claim it, meaning they miss out on winter fuel payments too.
The Government has admitted the decision will force up to 100,000 additional people into relative poverty.
Chancellor Rachel Reeves insisted the policy, which could save the Treasury £1.4billion, was needed to help plug a £22billion “black hole” in the public finances.
Energy watchdog Ofgem announced in February that the energy price cap from for a typical household using electricity and gas and paying by Direct Debit would go up by 6% to £1,849 per year, £159 higher than the price cap set for the same period last year.
Labour has also announced it will not pay compensation to so-called WASPI women affected by state pension age increases.
