Energy bill discount ruled out for people on PIP, DLA and Attendance Allowance

A person in a wheelchair holding a utility bill
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A new update has been issued on proposals to cut energy prices for the most vulnerable households. Campaigners have been calling for the introduction of a social tariff with lower charges per unit of gas and electricity.

Disability equality charity Scope has been among the organisations urging the Government to set up a cut-price tariff for those who use more energy to keep warm or to power essential equipment including wheelchairs, ventilators and hoists. It would help those on disability benefits such as Personal Independence Payment (PIP), Disability Living Allowance and Attendance Allowance.

Age UK had proposed that a social tariff should be set at half the cost of the typical energy bill and targeted at households living in poverty and/or in receipt of means-tested benefits, disability benefits or Carer's Allowance. This would deliver support to the 9 to 10 million UK households at the greatest risk of fuel poverty, it said in a parliamentary briefing.

The plans could have helped to ease the impact of cuts to the Winter Fuel Payment, which is now being restricted to those on the income top-up Pension Credit. Ministers are said to have discussed the idea of a special low tariff for the poorest and most vulnerable households but questions over how it would be funded mean it's not thought to be a viable option.

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Last month, Labour's energy consumers minister Miatta Fahnbulleh held talks with suppliers including Octopus, asking for help with a marketing campaign to alert customers to support that is already available. Ministers also asked firms about long-term reforms for energy bills, including a social tariff.

The measure would take the form of a targeted discount for poorer customers, below the price of the cheapest available standard energy tariff. However, Octopus Energy boss Greg Jackson suggested it wasn't a workable option because of the big question of who would pay for the idea.

He told the PA news agency: "It's either going to be the Government, in which case they need to put taxes up, or it's going to be paid for by other energy customers, in which case bills go up for everyone who's not getting it. The challenge is that bills are already too high."

Instead, the Octopus boss has been lobbying ministers to introduce another pricing system, based on the use of clean energy. The system, known as locational marginal pricing, would see people living near wind farms pay less for electricity.

Regional pricing is "the critical thing we need to do", Mr Jackson said, citing a recent report carried out by FTI Consulting, which claimed it could save billpayers £51 billion by 2040. Octopus already offers time-specific discounts for people living near wind farms of up to 50 per cent in high winds, when the turbines generate more power.

The initiative has led to tens of thousands of people contacting Octopus since 2021 asking for turbines to be built near their homes, he said. But critics say it would be unfair for people to pay less based on where they live.

Mr Jackson said that while the biggest discounts will be the areas with the most electricity generation, such as areas of Scotland, the price would drop in every region because the transmission system would also be more efficient.

The Labour Government has introduced several changes since the general election, including forming a new state energy investment firm, GB Energy, to help boost renewables. It is also consulting on reforms to the planning system designed to make it easier to upgrade the power grid and build clean energy projects, which Mr Jackson said he supports.

Mr Jackson said that, in the meantime, energy suppliers should be helpful to the Government and give extra support to elderly people losing their Winter Fuel Payment. He added: "We all know there were some people receiving the fuel allowance who didn't need it – that costs everyone else money. But then there's the grey area of people losing it that need it – that's where we can help.

"In these transition periods, it's easy for people to kick and scream. Alternatively, companies and others can say 'how do we make this work in a way that is best for Britain and, in our case, best for our customers?' So now let's be helpful in making sure that when you make those decisions, we can look after the people who will be worst affected."

Ministers should keep a close eye on the impact of the policy if this winter is colder than usual, Mr Jackson said, and be ready to act if more support is needed.

Octopus, the UK's largest energy supplier, announced last month that it will continue its £30 million assistance fund into this winter for pensioners who do not qualify for the Winter Fuel Payment. The company also has a range of other measures, including giving out free electric blankets to vulnerable customers.

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