
Energy Secretary Ed Miliband blamed the rise in energy prices this autumn on the Conservative government’s failure to invest in renewable energy.
But his shadow Conservative MP Claire Coutinho said cheaper non-renewable energy should be prioritised over carbon reduction targets to help struggling families this winter.
The regulator’s new price cap will mean households’ energy bills will rise by an average of £149 from October, a rise which Obgem blames on rising global tensions and extreme weather.
The increase comes after Chancellor of the Exchequer Rachel Reeves decided to scrap winter fuel allowances worth up to £300 for pensioners who are not in receipt of benefit or pension credit.
The Scottish Government has announced it will follow the lead of the UK Government and stop paying winter fuel surcharges for all pensioners.
There has been frustration within the Labour party after Labour MP Rachel Maskell publicly called for the government to “reconsider” the removal of winter fuel allowances from mid-September, particularly for those just over the pension credit limit.
Mr Maskell told BBC Radio 4’s Today programme he was “deeply concerned” about the decision, which he pointed out was not included in Labour’s manifesto.
Mr Miliband acknowledged that the rise in prices for the “average household” to £1,717 a year was “deeply worrying”, but insisted lower energy bills would come from “clean, domestically produced electricity”.
“The increase in the price cap is a direct result of the failed energy policies we inherited, which have left our country at the mercy of an international gas market controlled by dictators,” he said.
“The only solution to lower electricity prices and increase energy independence is a government mandate to pursue clean, indigenous electricity.”
“That’s why we took immediate action, lifting the ban on onshore wind, agreeing unprecedented amounts of solar power and setting the largest-ever budget for renewable energy auctions.”
But Coutinho accused the Workers’ Party of going in the wrong direction.
“Instead of prioritising cheap energy, the new Labour government is pursuing Ed Miliband’s reckless net-zero target without any consideration of the cost,” she said.
“And far from promising to save every household £300 on their energy bills, one of his first acts in government will be to remove Winter Fuel Allowance from 10 million pensioners this winter.
“Their failure to be honest about their plans means millions of pensioners have no plan in place to deal with rising energy bills this winter.”
Fuel poverty charity National Energy Action (NEA) said the number of people living in fuel poverty would rise to six million this winter and called for the winter fuel allowance to be paid automatically to 880,000 pensioners who are eligible but have not applied for it.
Her opponent, Rachel Reeves, always made it clear that she wasn’t trying to be liked, but to be trusted.
So saving £1.4bn a year by scrapping winter fuel payments for the majority of pensioner households is concrete demonstration that she will not shy away from difficult decisions in Government.
Politically, she wants to establish that these decisions have been driven by what Labor calls the “toxic legacy” of the previous government.
Therefore, having announced the abolition of benefits for many elderly people, a complete change of policy seems unlikely.
Her previous policy shift to a £28 billion green investment pledge supported greater, not looser, fiscal discipline.
But scrutiny and pressure will increase: Maskell is so far the only Labour MP to publicly call for a rethink, although privately some on the left share her concerns.
The depth of discontent within the Labour Party is unclear at this stage, with Parliament in its summer recess.
Some newly elected MPs are happy to defend the Chancellor’s decision, pointing to the retention of the triple lock – a measure that ensures pensioners’ incomes rise in line with prices and wages.
But the Conservatives have accused Labour of “dishonesty” for not including the winter fuel allowance in their manifesto.
The party is trying to force a debate on the issue in the House of Commons when parliament returns in September.
Is it a political issue?
Labour has set out a future-proof (but not uncontroversial) energy plan that includes better home insulation and cheaper power sources, but the looming rise in energy prices has led some charities to call for more support for pensioners.
Their focus is on people who are not wealthy but who are not eligible for pension deductions.
A number of ideas have been put forward, ranging from allowing local authorities to increase their hardship funds to giving lump sum payments to pensioners living in low council tax rate homes.
It is unclear whether the autumn budget will see any degree of reversal of the Chancellor’s policy.
But there are potential political problems.
The government is looking to encourage up to 880,000 people who are not currently in receipt of pension credit to apply for it in order to qualify for the Winter Fuel Allowance.
But what happens if by winter some or many people have still not submitted their applications? Will ministers refuse support to those they identify as needing it?
“I was beaten”
Energy Minister Miatta Fambulle has invited energy suppliers Ofgem, Energy UK and Citizens Advice to attend next week’s meeting.
In her letter, she said she wanted to discuss ways the companies could “further support consumers this year, including taking proactive steps to prevent customers from falling into energy debt.”
Liberal Democrat local government spokesman Helen Morgan said too many people were being hit hard by energy costs and fuel poverty.
“Families and pensioners who have suffered for years from the cost of living crisis will be deeply concerned to see another significant increase in their energy bills,” she said.
“This Tory legacy is making people’s lives worse and the new government must take urgent steps to fix this.”
Green Party co-leader Carla Denier said customers were “paying more for a crisis they did not create”, and welcomed future price cuts promised by the government’s new state-owned energy company GB Energy.
She said this needed to be strengthened with a national home insulation programme and the abolition of income-limited winter fuel allowances so pensioners “know they can afford to stay warm”.
Octopus Energy founder Greg Jackson claimed the government’s investment in renewable energy would “slash electricity bills everywhere, saving at least £2 billion a year and giving some parts of the UK the cheapest electricity in Europe”.
“The way to get prices down is to grow cheaper wind and solar power in the UK and improve markets so costs are determined locally rather than global gas prices,” Mr Jackson said, adding that “bold reforms to grid connections” were also needed.