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Sep 9 2024

Winter fuel cut vote will test Sir Keir Starmer’s authority | Politics News

Sir Keir Starmer warned during the election campaign of the need for “tough decisions”, but carefully avoided setting out where the axe would fall.

Now it’s clear who will be losing out – starting with most pensioners losing winter fuel payments worth up to £300 – unease is bubbling under the surface.

Politics live: Number 10 not ‘softening’ winter fuel payment cut

There is no doubt the government will win Tuesday’s vote as they have a huge majority of 174.

But the number of abstentions – or MPs who cannot face voting for it – especially if they number dozens, will test the prime minister’s authority and signal whether his backbenchers have the stomach for more of these cuts.

Over the summer, Labour MPs have seen their inboxes fill up with pensioners and their families angry that those who rely on the payments fear they will face a cold winter in hardship.

The benefit will be restricted, Chancellor Rachel Reeves announced in July, to those who claim pension credit, and no longer given to the 10 million people aged over 66 who don’t.

She told MPs at a meeting tonight that it was a difficult decision, and she “wasn’t immune to the arguments against it”, but that sticking to it was a question of economic credibility.

Government sources claimed she had won the argument that “‘no one likes it, but we have to do it”.

Pensioners, she said, could blame the Conservatives for leaving a financial black hole.

The problem is that 880,000 pensioners who are eligible for this top-up do not claim it, so they will lose out despite being the poorest – including some on just £13,000 a year.

The government has run a campaign aimed at increasing the uptake, but the payments will go straight away.

Campaigners – pensioners have vocal campaign groups on their side – also say the million or so people just above the threshold will also struggle.

Dozens of Labour MPs are weighing up whether they can vote for the measure, which will be a three-line whip. Some feel the £1.5bn saving will have a painful price.

MP for York Central Rachel Maskell, who told Sky News she would abstain, said the swift timing of the vote, and lack of assessment of its impact, has left many concerned – not just those on the left sceptical about Sir Keir’s leadership.

A House of Lords committee which scrutinises secondary legislation said it had been introduced without proper evidence of its impact.

A former member of the shadow cabinet, who will be reluctantly voting for the measure, told me he expected the chancellor to be forced to make changes in the run-up to the budget.

In an interview this weekend, Sir Keir stood firm, saying there would be no change in course – as well as further difficult decisions coming down the track.

He will head to Brighton in the morning in a big moment for an incoming Labour prime minister – addressing the Trades Union Congress (TUC) annual conference.

He will be braced for criticism, with major union leaders including Sharon Graham, general secretary of Unite, and head of the TUC, Paul Novak, piling the pressure on and saying he should U-turn.

Sir Keir knows the cut will get through parliament and has shown he can be ruthless, having withdrawn the party whip from MPs who voted to axe the two-child benefit cap.

But Labour MPs who back the measure through gritted teeth, and feel it’s had too high a price, will be harder to win over next time.

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Sep 2 2024

Sir Keir Starmer: Cutting winter fuel payments will stabilise the economy | Politics News

Sir Keir Starmer has defended cutting the winter fuel allowance for 10 million pensioners as he faces pressure to rethink the move.

The government announced last month the universal payment to pensioners, worth between £100 and £300 a year, would be restricted to just those who receive pension credit.

Sir Keir and Chancellor Rachel Reeves have been heavily criticised for the move, including by some Labour MPs and Age UK.

But the prime minister said on Monday: “We have found a £22bn black hole in the economy. And we’ve got to fix it.

“What we’re not going to do is pretend it isn’t there or paper over it. That’s what the last government did, and it made it worse. That means we’ve got to make tough choices.

“I don’t want to cut the winter fuel allowance. I don’t think anybody in the government wants to do that. But we’ve got to fix the foundations of our economy.”

He said after fixing the foundations of the economy “we can build a build a better future that pensioners and so many other people voted for in this election”.

“This is a tough decision, not a decision I want to make, but I’m absolutely determined will stabilise the economy and fix the foundations,” he added.

Read more from Sky News:
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Labour MP Jessica Asato, newly elected in July, wrote to Work and Pensions Secretary Liz Kendall last week calling for changes to the policy, specifically to increase the number of people who can claim it.

The Conservatives and Lib Dems have hit out at the plan, with Lib Dem leader Sir Ed Davey calling it the government’s “first big mistake”.

Both parties had called for a vote on axing the payments but the government has refused to hold one.

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The UK’s leading charity for older people, Age UK, has written to Ms Reeves with a detailed plan suggesting the allowance should be paid to two million more pensioners who are on other benefits, including housing benefits, council tax support, attendance allowance and carers’ allowance.

On Sunday, Commons leader Lucy Powell told Sky News’ Sunday Morning With Trevor Phillips the move was necessary as the economy could have crashed if the government had not found the savings.

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Aug 30 2024

New Labour MP writes to government suggesting changes to winter fuel payment cut | Politics News

A new Labour MP has written to the government calling for a rethink on the means testing of the winter fuel payment, Sky News has learnt.

Chancellor Rachel Reeves announced last month that the universal payment to pensioners, worth between £100 and £300, would be restricted to just those who receive pension credit in a bid to save more than £1bn.

Concerns have been raised, however, that pensioners falling just outside the credit threshold could be left vulnerable.

Jessica Asato, who was only elected in July this year as the Labour MP for Lowestoft, has written to Work and Pensions Secretary Liz Kendall calling for changes to the policy.

Speaking on the Sky News Daily podcast, Sky News’ deputy political editor Sam Coates said: “We at Sky know that at least one Labour MP, Jessica Asato, has written to Liz Kendall to talk about how nervous they are about this policy.”

He said this was to “suggest bluntly that they change it”.

“I think what Jess Asato wants to do is to widen the number of people that can claim it.

“She accepts that… it’s going to be taken away from some.

“But her concern is the kind of the people who just miss out – they aren’t exactly rich, but they don’t qualify for Pension Credit.

“And therefore that’s a big drop in their income at a point where, of course, the energy price cap is going to rise, so energy bills are going to rise this autumn.

“And so that is one of the reasons for particular concern.

“So she wants it to be given to people who apply for council tax reductions because they’re on a lower income, which would widen the number of people who qualify for it.”

As political correspondent and Sky News Daily host Liz Bates pointed out, it is notable that a Labour MP is raising her displeasure so early in their parliamentary career.

It shows the government could have trouble with its parliamentary party when the House of Commons returns next week.

Read more:
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Are you still eligible for the payment?
Analysis: Reeves under attack on two fronts

Ms Asato’s concerns are shared by Caroline Flint, who was a Labour MP between 1997 and 2019, and a minister in the New Labour years.

Ms Flint is now chair of the Fuel Poverty Committee.

Writing to Miatta Fahnbulleh, the minister for energy consumers, Ms Flint said: “We hope the department will examine whether there is a significant group of pensioners on low and fixed incomes outside the threshold chosen by the chancellor who may suffer genuine hardship. “Particularly, we would ask the government to consider the impact on those pensioner households with annual incomes above the Pension Credit threshold up to £18,200.

“There are also up to 880,000 households who currently do not claim Pension Credit and previous campaigns have not been successful in significantly boosting take up.”

Ms Flint added that the biggest impact could be largest on women in single-occupancy homes.

Ms Asato said: “I did write last week, and I’m incredibly disappointed it’s been leaked as it was a private letter. Since then I have been reassured.

“The scale of the Tory inheritance is shocking and I – like many others – am furious with the Tories for forcing us into these tough decisions so early in the parliament.

“I have been reassured by the fact we are continuing to protect the triple lock which saw the state pension rise by over £800 last year and an above inflation pension increase will be announced at the budget – which obviously takes into account the cost of energy.

“I am confident this is the right course of action and recognise it is part of a package of tough decisions to come to provide economic stability, so we can all deliver for our constituents as Labour MPs.”

The Department for Work and Pensions have been approached for comment.

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Aug 23 2024

Pensioner, 90, says he will have to shower once a week as government withdraws fuel payment and energy bills go up | UK News

A pensioner who faces a fuel payment cut says he worries about whether he will make it through the winter when energy prices go up.

Roy William Roots, 90, is among the estimated 10 million pensioners who are facing a cut to their £200 or £300 winter fuel payment, which will now only go to those who receive pension credit or other means-tested benefits.

It comes as industry regulator Ofgem said the energy price cap per household is set to rise by 10% in October to an annual average of £1,717.

The hike will see typical households spend £12 a month more, or £149 a year, on gas and electricity bills when using direct debit.

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Mr Roots, from Maidstone in Kent, said the news of energy bills going up further was “terrible”.

The pensioner is already taking drastic measures to avoid being slapped with bills he can’t afford, like cooking in batches for a few meals, doing the washing at 10pm and only putting the heating on in November.

He told Sky News: “Before I had a shower, I had a bath, and I used to have it up to my neck and lie in it for hours. But now I might shower every two to three days – I just can’t afford to have it on.”

Mr Roots, who has struggled with his mental health in the past, added: “It depresses me.”

He added he is already starting to think about saving for the winter to make sure he will be able to plug the gap left by the government’s decision to cut the winter fuel benefit.

Mr Roots said he will likely have to shower once a week or cook food for three or four days instead of two.

“It makes me feel horrible,” Mr Roots said, adding he worries about whether he will be able to get through the winter when faced with choices like “do I cook or do I have my heating on?”

Addressing the Labour government, he said: “I’d want them to help us still. To be fair and help us out.”

Read more:
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Ofgem chief executive Jonathan Brearley said: “We know that this rise in the price cap is going to be extremely difficult for many households.

“Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.”

Energy Secretary Ed Miliband admitted the rise in the cap was “deeply worrying” but defended the cuts to winter fuel payments.

He said: “The truth is that the mess that was left to us in the public finances is what necessitated that decision around winter fuel payment and us focusing it on those who need it the very most.”

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Aug 23 2024

Energy price cap to rise in October amid backlash over loss of some winter fuel payments | Business News

The energy price cap will rise to an average annual £1,717 from October, the industry regulator has confirmed as the clock ticks down to the loss of winter fuel payments for millions of pensioners.

The new figure represents a 10% a year – or £12 per month – leap in the typical sum households face paying for gas and electricity when using direct debit.

Ofgem said that the rise was largely due to higher wholesale gas prices and it urged bill-payers to “shop around” as there are fixed rate deals on the market that could offer savings.

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Its decision means the cap, which is adjusted every three months and limits what suppliers can charge per unit of energy, will remain around £500 up on the average annual bill levels seen before Russia’s invasion of Ukraine.

It is, however, set to be £117 lower than the October 2023 level.

That gap may partly explain why chancellor Rachel Reeves likely opted to end winter fuel payments – worth up to £300 annually – for around 10 million pensioners not in receipt of means-tested benefits including pension credit.

She blamed the measure, revealed last month, on the need to help plug a “black hole” in the public finances left by the Conservatives but has faced a widespread backlash including from within Labour’s own ranks.

Charities warn that heating costs remain punitive and a key plank of the continuing cost of living crisis that will force many to choose between heating and eating this winter.

Research by Citizens Advice suggests one in four could be forced to turn off their heating and hot water amid record levels of energy debt.

Energy Secretary Ed Miliband admitted the rise in the cap was “deeply worrying” but defended the cuts.

“The truth is that the mess that was left to us in the public finances is what necessitated that decision around winter fuel payment and us focusing it on those who need it the very most.

“That’s why this government is also driving throughout the coming months to get the people, the 880,000 pensioners who are entitled to pension credit and not getting it to try and get them to take it up, to make them aware of this so they can get the winter fuel payment as well.”

An updated forecast issued by the energy research consultancy Cornwall Insight predicted a further 3% hike in the cap during the peak use months of January-March to £1,762.

SHOULD I TAKE A FIXED DEAL?

Cast your mind back to before the COVID pandemic and you will remember that a reluctance among households to switch suppliers helped give birth to the energy price cap.

The majority of homes were on so-called default tariffs – sometimes through no choice of their own – but those able to choose and the more financially savvy had a fixed rate deal, often changing their supplier once a year to bring down their bills.

But they largely disappeared from view after dozens of suppliers collapsed amid a series of cost shocks, latterly caused by the invasion of Ukraine by Russia, forcing the bulk of households to hunker down and rely on the price cap.

It certainly is not perfect and is ripe for reform, as Ofgem has suggested again today.

A feature of the energy market this year has been the return of fixed rate deals.

They are fewer in number but can offer certainty on what you will pay over the term of the deal.

Ofgem figures show that around one million more households have taken that opportunity since April, bringing the total to five million.

Are they worth it? Is it too late?

The price comparison site Uswitch claimed today that savings of about £125 on the October price cap level are out there.

Emily Seymour, the energy editor at consumer group Which?, cautioned: “As a rule of thumb, we’d recommend looking for deals around the price of the current price cap, not longer than 12 months and without significant exit fees.”

Ofgem chief executive Jonathan Brearley said: “We know that this rise in the price cap is going to be extremely difficult for many households. Anyone who is struggling to pay their bill should make sure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.

“I’d also encourage people to shop around and consider fixing if there is a tariff that’s right for you – there are options available that could save you money, while also offering the security of a rate that won’t change for a fixed period.

“We are working with government, suppliers, charities and consumer groups to do everything we can to support customers, including longer term standing charge reform, and steps to tackle debt and affordability.

“Options such as changing how standing charges are paid and getting suppliers to offer more tariff choices and give customers more control are all on the table, but there are no silver bullets.

“Any change could leave some low-income households worse off, so it’s important we hear views on our proposals and continue working with the government to see what targeted support could help customers.

“Ultimately the price rise we are announcing today is driven by our reliance on a volatile global gas market that is too easily influenced by unforeseen international events and the actions of aggressive states. Building a homegrown renewable energy system is the key to lowering bills and creating a sustainable and secure market that works for customers.”

The government’s energy strategy includes measures to eradicate the country’s dependence on natural gas for heating and electricity through a greater commitment to wind power, including onshore.

The hope is for lower bills in the future.

Jess Ralston, head of energy at the Energy and Climate Intelligence Unit said: “A lack of progress on energy efficiency and heat pumps means that our reliance on gas hasn’t fallen much in recent years, despite the volatility in the international markets forcing bills to skyrocket.

“The new government has made steps on renewables, but not confirmed its plans for home heating or insulation yet, and there is clearly no time to waste.

“Unless we start to reduce our demand for gas, we will only see our dependence on foreign imports rise. Oil and gas from the North Sea is sold on international markets to the highest bidder so doesn’t help with our bills or energy independence.

“With the removal of the winter fuel payment for some pensioners at the same time as bills going up, it’s likely that some will struggle and it remains to be seen if the government will bring in measures to support those worst hit by the removal of winter fuel payment.”

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Jul 26 2024

Fuel prices remain a rip-off, competition watchdog declares | Business News

Competition among fuel retailers is “failing consumers” because drivers are still paying too much to fill up, according to regulators.

In an update on its monitoring of the fuel market, the Competition and Markets Authority (CMA) said the cost to all motorists from the previously identified increase in retail fuel margins since 2019 was over £1.6bn in 2023 alone.

The watchdog found last year that drivers had overpaid in 2022 by £900m at supermarket fuel sites alone.

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The CMA also announced that it would give separate updates in the autumn on its work covering the cost of baby infant formula and supermarket loyalty schemes.

It added there was little evidence supermarkets’ loyalty prices were misleading shoppers, as consumer groups have widely suggested.

Efforts to improve competition yet to have an impact

The regulator’s fuel price study has resulted in action aimed at bolstering competition but it is yet to get up to speed.

The CMA said it was supportive of continuing efforts to secure a compulsory fuel price monitoring system to help consumers make informed choices at the pumps.

As the new government presses ahead on plans for Pumpwatch, the CMA said its temporary price data-sharing scheme was still only covering 40% of service stations.

It admitted it was not comprehensive enough to be utilised by map apps or sat-navs to bring accurate, live information to people.

The regulator’s third monitoring report follows long-standing claims by motoring groups of fuel profiteering.

While supermarket chains used to use petrol and diesel as a means of attracting shoppers, that changed after the COVID pandemic when the retailers invested in the cost of household essentials instead as the cost of living crisis gathered pace.

Independent fuel retailers have long denied suggestions that prices are too high, insisting critics are taking no account of their own additional costs for things such as wages and electricity.

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Prices should be falling

RAC Fuel Watch data showed average unleaded costs at 145.69p per litre and diesel just shy of 151p.

Its website indicated that prices should be falling.

Brent crude oil costs have come down across the past three weeks from $87 a barrel to $82 while the oil-priced dollar has also weakened against the pound which will also help reduce some costs.

Much of the regulatory attention has been on the prices that fuel retailers pay suppliers and whether lower prices are being passed on.

Sarah Cardell, the CMA’s chief executive, said: “Last year we found that competition in the road fuel market was failing consumers, and published proposals that would revitalise competition amongst fuel retailers.

“One year on and drivers are still paying too much.

“We want to work with government to put in place our recommendation of a real-time fuel finder scheme to kick-start competition among retailers.

“This will put the power in the hands of drivers who can compare fuel prices wherever they are, sparking greater competition.”

RAC head of policy Simon Williams said: “The report is, once again, confirmation of what we have known and been campaigning against for many years.

“Our analysis has long shown that even accounting for retailers’ increased operating costs, margins on fuel are at extremely questionable levels.”

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Mar 5 2024

Fuel duty freeze set to be extended again in budget | Politics News

Chancellor Jeremy Hunt is set to extend a 5p cut in fuel duty in his pre-election budget on Wednesday, Sky News understands.

Such a move in the spring budget, which would be welcomed by motorists across the UK, would cost the Treasury around £5bn to implement.

The “temporary” fuel duty cut was introduced by Rishi Sunak in 2022, and was due to expire this month.

It was extended for 12 months in March 2023, and Mr Hunt looks set to do the same tomorrow.

Other reports suggest the chancellor is considering a 2p cut in National Insurance, on top of the previous tax cut he made in the autumn statement.

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Stated government policy is that fuel duty should rise in line with inflation, but this has not happened since 2011.

And in 2022, when then-chancellor Mr Sunak announced a further 5p would be cut from fuel tax in a bid to bring prices down, it was initially supposed to last a year, but was extended last spring and is set for another stay of execution.

The continued implementation of what is supposed to be a temporary freeze has been criticised by economists and official forecasters for making it difficult to accurately predict the impact of budgets.

There are also concerns the 5p cut is being used by retailers to boost profits.

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The RAC claimed last December that retailers had made an extra £184m from motorists in the preceding two months alone by not passing the 5p cut on to consumers.

Freezing fuel duty and keeping the further 5p relief would allow Mr Hunt and the Conservative government to sell the changes as a tax giveaway ahead of the next election.

This budget will set the fiscal stage for the next nationwide vote, with the Conservatives wanting to see Mr Hunt cut taxes in a bid to overturn the party’s dire polling compared with Labour.

But high interest rates on government debt and low growth mean there is little room for financial manoeuvrability.

The chancellor has already indicated public service funding may suffer in order to point the UK in a direction of lower taxes.

As well as fuel duty, Mr Hunt is believed to be eyeing a potential cut to National Insurance.

Reducing this levy is cheaper than cutting income tax as fewer people pay it – but it also means that those who don’t pay NI won’t see a benefit, including the key Conservative demographic of pensioners.

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Another mooted policy is changing the non-dom tax status, something Labour has been talking about for a long time.

Shadow chancellor Rachel Reeves criticised the Tories for “pickpocketing the Labour Party of its policies” following the speculation, telling Labour MPs on Monday the chancellor “is cynically talking up maxing out headroom to pay for pre-election promises – I see through it and so do the British people”.

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Nov 28 2023

Guilt free flying or clever PR? What it was like on Virgin Atlantic’s new 100% sustainable aviation fuel flight | Climate News

“It works!” declares Virgin Atlantic founder Sir Richard Branson as we cross the Atlantic on this record-breaking flight using 100% sustainable aviation fuel (SAF), largely made up of used cooking oil.

In his affable way, he recalls the times he had to be rescued from the very same ocean during previous record-breaking attempts. We smile along, a little nervously.

There are no ordinary passengers on board the Boeing 787. Instead, milling about the cabin are engineers, scientists, aviation officials, Mark Harper, the transport secretary, and journalists.

So what’s it like to travel on the “fat flyer” as it’s been dubbed?

Well, perhaps a little disappointingly, just like any other flight.

SAF looks, smells and performs just like normal aviation fuel and can be dropped in normal engines without the need for modification.

Sir Richard and Virgin know how to make a big noise about their achievements so, as I look out of the window over the ocean, I ponder is this just another great way to get attention, or actually another important step along the flightpath to what the government likes to call “guilt free flying”?

The truth is, probably a bit of both.

Virgin Atlantic has, like British Airways and other UK-based airlines, genuinely committed to trying to find a greener, cleaner way of flying.

After all, in a highly competitive market they know passengers are demanding it.

Virgin points out it has one of the youngest and most fuel-efficient fleets in the skies which has already reduced carbon emissions by more than 20%.

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The airline is working hard to reach the government’s ambitious target to increase the use of SAF to at least 10% by 2030.

This flight however is not 100% emission-free, but rather “net zero” with the airline offsetting carbon emissions made during the journey.

Plus the very process of making SAF uses lots of energy, and SAF critics argue there simply isn’t anything like enough raw material or “feedstock” in the UK to produce it.

The Royal Society estimates more than half of all the UK’s agricultural land would be needed to produce enough SAF to replace the jet fuel used by Britain’s aviation sector.

Pressure is being put on the government to help invest in SAF technology and to scale up production.

Green campaigners also point to the growth in flying.

The International Air Transport Association expects the number of passengers to nearly double by 2036, and many environmentalists say the best way to save the planet is to drastically reduce our air miles.

So as flight VS100 ploughs along over the pond don’t be mistaken into thinking it is the answer to all our climate-friendly flying prayers.

Instead, SAF is a mid-term solution to helping make a decent dent in decarbonising aviation while other greener technologies, like hydrogen, are developed.

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Nov 25 2023

Fuel prices fall after petrol stations given ‘good prod’ by regulator | Business News

Fuel prices have dropped twice as fast since petrol stations were warned they were ripping off motorists, analysis has shown.

A Competition and Markets Authority (CMA) report on 8 November accused retailers of failing to pass wholesale cost savings on to customers.

The regulator said the differences between pump prices and wholesale costs in September and October were “significantly above the long-term average”.

It took 31 days for prices to decrease by 3.5p per litre from October 8.

However, in just 14 days after the CMA issued its report, prices reduced by 3.75p.

A spokesperson for the AA, which carried out the analysis, said it is “amazing what happens when the competition watchdog gives the fuel trade a good prod”.

“Pump prices fall at twice the speed and £2 comes off the cost of a tank of petrol within a fortnight,” they added.

Fuel retailers to face increased scrutiny

Despite the drop, the RAC has said motorists are still “losing out massively at the pumps”.

A spokesman said the average retailer margin on petrol is around 17p a litre – 10p more than the long-term margin.

The CMA’s report came ahead of it being granted new powers to act as the UK’s fuel price watchdog.

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Legislation that would allow it to gather more information to provide regular public updates on market competition is going through parliament and is expected to come into force next year.

It would see the CMA report evidence of unjustified price increases.

The UK’s four fuel-selling supermarkets are among the retailers that have agreed to share daily price data, and the government plans to make this mandatory.

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Oct 4 2023

Fuel retailers deny profiteering as pump prices shoot up | Business News

Fuel retailers have dismissed claims that drivers are being overcharged following a surge in pump prices.

Data released by the RAC on Wednesday showed an 8p per litre surge in the cost of diesel last month to a new average of 163.1p.

Petrol prices rose by nearly 5p per litre to 157p.

The motoring group blamed the continued hikes on production cuts agreed by the Opec+ group of oil-producing nations, which have helped send Brent crude oil costs up since July.

A barrel stood at around $72 then.

It has nudged towards $100 in recent weeks and currently stands at $90, placing greater upward pressure on inflation more widely as the additional bills only add to the cost of living crisis.

Because oil is priced in dollars, a weakening of the pound against the US currency has also contributed to the additional bills at the fuel pump.

The RAC, however, claimed that retailers were overcharging petrol customers.

Its fuel spokesman, Simon Williams, said: “Our analysis of RAC Fuel Watch wholesale and retail data shows that petrol is currently overpriced by around 7p a litre, although the price of diesel is likely to go up further still in the coming weeks.

“It’s worrying that retailer margin across the UK is higher for petrol than it should be considering the big four supermarkets were told off by the Competition and Markets Authority for overcharging drivers by £900m in 2022.

“While many have voluntarily started to publish their prices ahead of being mandated to in law, we still have a situation where wholesale price changes aren’t being fairly reflected on the forecourt.”