Wealthier households to pay more to subsidise poorest’s heating bills under energy plan

Labour urged to double Warm Home Discount as winter debt crisis looms

Wealthier households face paying more to subsidise the heating and power bills of the poorest homes this winter under plans presented to ministers.
Energy industry representatives presented a plan to Miatta Fahnbulleh, the energy consumer minister, on Wednesday to help support the country’s poorest by increasing the Warm Home Discount.
The scheme allows millions of low income households to claim £150 off their electricity and heating bills over winter. 
Under the proposals the payment could be more than doubled, funded either by raising the existing £20 levy added to all power bills or through taxation – or a mixture of the two.
It comes as ministers draw up plans to address a looming winter energy debt crisis.
Arrears have already surged across the country in recent years and the Government’s decision to scrap the winter fuel allowance for about 10m pensioners is expected to deepen the problem.
Ms Fahnbulleh told the assembled executives that the Government would support vulnerable households this winter “by delivering the Warm Home Discount to eligible low-income households”.
The Warm Home Discount maximum payment of £150 has hardly risen since the scheme was introduced over a decade ago when domestic dual fuel energy bills averaged about £1,200. Bills have since risen to an average of £1,669 and the amount on offer is now seen as completely inadequate for keeping poorer households out of debt.
Energy UK, the trade body, and Citizens Advice, whose representatives attended the meeting, believe the payments must at least double to prevent debts surging any further.
Energy UK said in a report last month: “The quickest and most pragmatic way to improve short-term support is through reform of the Warm Home Discount… to offer serious protection this £150 payment should be at least doubled for the most vulnerable households.”
Ms Fahnbulleh said: “We are committed to putting in place winter support this October. We will be hashing out the details over the next month so that families that need it are protected in the colder months.” 
Government statistics show that 3.1m households qualified for the Warm Home Discount last winter, a 646,000 increase on the previous winter. This is expected to rise again this coming winter.
It means that over 10pc of British homes are deemed to be too poor to pay their own energy bills, with many of them getting ever deeper into debt. Domestic energy debts have risen from £1.3bn four years ago to £3.3bn today.
Among British Gas’s 7.5m residential customers, debt surged massively from £501m in 2022 to £764m in 2023. EDF, with 5.2m domestic and business customers, reports 469,000 customers in debt owing £518m – an average of £1,104 per household.
In a statement issued after the meeting with industry, the Department for Energy Security and Net Zero said: “Energy suppliers must play their part to make sure struggling households are supported and do not fall into debt, and that those currently in debt or arrears are better protected.”