Millions of pensioners will have to find an extra £500 to heat their homes, piling pressure on Labour to reverse the axing of winter fuel payments.
In a brutal double whammy, the energy regulator yesterday announced it would hike the price cap by 10 per cent from October – equivalent to a £149 hit for the average household.
Analysis by the End Fuel Poverty Coalition found that in real terms pensioners’ bills will jump by 39 per cent – around £483 a year.
MPs and charities warned that withdrawing the payments when bills are set to soar will leave pensioners facing their ‘worst winter on record’. They urged Ms Reeves to think again last night as it emerged she had carried out ‘no impact assessment’ before stripping the payments.
Reinstating the winter fuel allowance would more than cover the cost of the energy price cap rise for the majority, meaning pensioners would not pay any more.
Last night the Conservatives’ energy spokesman called on Ms Reeves to ‘stop all this in a second’.
Claire Coutinho told the Mail: ‘Unions and industry leaders have already sounded the alarm that Labour’s plan will leave us colder and poorer. Millions of pensioners will be hit with higher energy bills this winter – but Rachel Reeves could stop this all in a second if she had the courage to pause her decision to scrap winter fuel payments.’
Simon Francis, of the End Fuel Poverty Coalition, said: ‘The stark truth of the matter is that this winter will be the worst on record for pensioners’ energy bills.
‘The Government needs to come up with a plan to prevent even more households from entering fuel poverty this winter and fast.’
Ms Reeves last month restricted winter fuel payments to those receiving the pension credit benefit as part of a package of measures to plug a £22billion ‘black hole’.
But in a note laid before Parliament on Thursday, when the timetale for the plan was slipped out, the Department for Work and Pensions said: ‘A full impact assessment has not been produced for this instrument as no, or no significant, impact on the private, public or voluntary sectors is foreseen.’
The backlash against the decision further intensified yesterday after Ofgem’s announcement that the energy price cap would rise by 10 per cent this autumn. It means the average household energy bill will increase by £149 from £1,568 to £1,717 – £117 cheaper than the cap in October last year which was set at £1,834.
Caroline Abrahams, of charity Age UK, said means testing the winter fuel payment was ‘reckless and wrong’ and ‘spells disaster for pensioners on low and modest incomes’.
Labour MP Rachael Maskell also spoke out against the move, telling BBC Radio 4’s Today programme: ‘I really urge the Government to think again about how it’s going to protect the most vulnerable people in our society, our pensioners, this winter.’
Yesterday Energy Secretary Ed Miliband sought to blame the Tories’ for the price cap hike, saying it was a ‘direct result of the failed energy policy we inherited’.
But Dennis Reed, of the Silver Voices campaign group, said: ‘This price cap hike exposes the political weakness of the new Labour Government – hastily pushing through an ill-thought-out policy to cut winter fuel payment without considering the cruel effect it has on the lives of hard-pressed pensioners this winter.’
Jonathan Brearley, chief executive of Ofgem, acknowledged the price cap rise would be ‘extremely difficult for many households’.
He urged customers to make sure they have access to all the benefits they are entitled to, contact their energy company for further support and ‘shop around’ for deals.