An estimated 570,000 more London homes will be given a £150 rebate on their energy bills in the coming winter.
Confirmation that Energy Secretary Ed Miliband has broadened the scope of the Warm Home Discount for more vulnerable households came after the Government’s U-turn on the Winter Fuel Payment. That extended eligibility to every pensioner with an income below £35,000.
A fall in the energy price cap set by regulator Ofgem also means that typical annual bills will drop by around 7% in July.
In total around six million homes across Great Britain will receive the £150 reduction, an increase of 2.7 million who were entitled to it previously.
In London the number of homes who are eligible goes up from 380,000 to 950,000.
The new rules means that every billpayer on means tested benefits will now qualify. Previously restrictions limited the payment to those on the guaranteed element of pension credit, or those on means-tested-benefits living in a “hard to heat” home.
The bill for expanding the Warm Home Discount will be paid by energy companies at a cost last year of nearly £600 million.
The widening of the scope of the scheme means the annual bill will increase dramatically, possible to close to £1 billion.
Energy recoup the costs through slightly higher bills for other customers.
Since the start of the scheme in 2011, more than £4.5 billion had been knocked off eligible customers’ bills by last year, according to Ofgem.
Prime Minister Keir Starmer said: “I know families across London are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill.
“Providing security and peace of mind for working people is deeply personal to me as Prime Minister and foundational for the Plan for Change.
“I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.”
Ed Miliband said: “Around 570,000 extra households in London will get vital support with the cost of living this coming winter, demonstrating this government’s commitment to put money in people’s pockets through our Plan for Change.”
The expansion of the Warm Home Discount will be partly paid for by new efficiency savings across the energy system. Ofgem has already confirmed a reduction in the operating cost allowance of the price cap for the average billpayer which will take money off bills.
Energy campaigners welcomed the move but said far more help is needed.
National Energy Action chief executive Adam Scorer said: “It’s hugely positive that across Great Britain, all low-income households on means-tested benefits will get some direct support to tackle unaffordable bills and record energy debts this winter.
‘Vitally, this includes many more low-income working-age households with children, who are living with the daily consequences of not having access to enough energy at home. These families are in dire need of more support - and so are many more who aren’t on means-tested benefits and aren’t getting any additional help.”
He added: “The Warm Home Discount is a lifeline for many vulnerable people National Energy Action work with, and it is good that more people will benefit. But the lifeline itself is frayed and far from sturdy.
“The rebate has only increased by a meagre £10 during a period in which energy bills have gone up by £500 a year and there is no clarity on the programme beyond the end of March next year.
'This announcement is good news for this winter, but the government needs to come up with a longer-term plan for providing deeper support in future for people who cannot afford a warm and healthy home.”
Dame Clare Moriarty, chief executive at Citizens Advice, said: “The expansion of the Warm Home Discount is good news for struggling households who haven't been eligible previously.
“But the £150 amount has not kept pace with rising bills and will struggle to touch the sides for families paying off a mountain of debt on top of soaring monthly costs.
“Bills are 52% higher than before the energy crisis, prices continue to be volatile, and one in ten households are in energy debt - with the amount owed growing each day.
“We need the government to look into longer-term solutions that provide more help to those who need it most, such as families with children and disabled people. There also needs to be more certainty about the support on offer to people in debt, including urgent progress from Ofgem on the debt relief scheme.”
