Hundreds of thousands of Londoners could miss out on the £100 winter energy support payment announced in the Budget, with new analysis branding the eligibility criteria a “postcode lottery”.
The measure, revealed by Chancellor John Healey on Wednesday, will see households in council tax bands A-D receive a £100 payout directly into their bank accounts to help with rising energy bills. The scheme is expected to cost the Government £2.6 billion.
One in Three London Homes Excluded
Research by Centre for London, the capital’s independent think tank, found that just 69% of properties in London fall within the A-D council tax bracket, meaning hundreds of thousands will miss out. Outside London, more than 82% of homes are eligible.
The discrepancy arises because eligibility is tied to council tax bands based on 1991 property values rather than current household incomes. A property in Band E, for instance, was categorised as such because it was worth more than £88,000 in 1991. Today, the same property could belong to a low-income family, a pensioner, or a young renter facing high energy costs and modest incomes.
High-Poverty Areas Affected Differently
Centre for London said this is particularly prevalent in London, where property prices have risen far faster than incomes over the past three decades, making council tax bands a weak measure of need. Some of London’s highest-poverty areas, such as Barking and Dagenham, would see more than 90% of properties qualify. However, areas with similarly high levels of poverty, such as Camden, Islington and Tower Hamlets, would only see between 55% and 68% of homes eligible.
The discrepancy has been branded a “postcode lottery” where “access to support is shaped by historic property valuations” rather than levels of hardship. Analysis previously reported by The Standard showed that the fewest homes in Kensington & Chelsea, Westminster, and Richmond-upon-Thames would qualify.
Criticism and Calls for Reform
The winter handout has also faced criticism from campaigners and think-tanks who have described it as badly targeted and too small, forcing Andy Burnham to defend the scheme. The Government also announced last year that the proposed Mansion Tax would also be decided by council tax bands.
Centre for London has long called on the Government to replace Council Tax with a proportional property tax based on up-to-date property values. Under the think tank’s proposals, households would pay a flat percentage of their value rather than being grouped into broad bands based on 1991 valuations.
Rob Anderson, Research Director at Centre for London, said: “Any extra support for households is welcome as bills start to rise through winter.
“However, Council Tax is a deeply flawed way to decide who receives that support. In London, two families can face similar financial pressures and worries about rising bills and yet will be treated differently because of how their homes were valued more than three decades ago.
“The fact that boroughs with similarly high levels of child poverty would see very different numbers of families qualify for support should ring alarm bells. If need and eligibility are drifting apart, the system is no longer fit for purpose. We need a fairer, more accurate approach in the form of a progressive, partially devolved proportional property tax.”
