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13 hours ago
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Keir Starmer has been warned that he will need to take “urgent action” to meet his goal of cutting energy bills by up to £300 by 2030, according to a report, as millions of UK households face higher energy costs from April.
The government’s plan to switch to a clean power system by 2030 will “ensure lower energy bills in the next decade”, according to research by industry body Energy UK. However it has warned that the effect will not be felt by the end of this decade and accused ministers of failing to set out an action plan for reducing household bills.
Last month, Starmer reiterated his commitment to the £300 cut, and said he wanted “bills to be low for a prolonged period of time”.
The average gas and electricity bill for a typical household in Great Britain will rise by £111 from April to £1,849 a year under the price cap from energy regulator Ofgem, after a period when colder weather and limited renewables have drained gas storage in Europe, pushing gas market prices higher.
Although bills have fallen since the peak that followed Russia’s full-scale invasion of Ukraine in 2022, they remain 34% higher than before the crisis and customer debt stands at a record near £4bn, the research showed.
Energy UK made a series of proposals for how to lower energy bills, including encouraging households to change their behaviour and act more flexibly, including using appliances at times of lower demand, or using electricity at times of excess wind and solar energy.
Reducing reliance on imported gas is the only long-term solution to bringing down energy bills because of the volatility of wholesale gas prices as a result of geopolitical events such as Russia’s invasion of Ukraine, according to Energy UK.
Households with “flexibility equipment” – including a battery, heat pump or electric vehicle – could save £115 a year, the report found, by using energy at non-peak times, while others could save smaller amounts of money by altering habits, and running their dishwasher at night, for example.
It is also calling on government to invest public money to significantly reduce bills, and explore how to benefit from the evolving energy system.
“Clean power is the only way to permanently deliver both energy security and stable, affordable bills, but the benefits are some way off,” said Dhara Vyas, Energy UK’s chief executive.
“Successive governments have failed to tackle the dual challenge of how we fairly pay for the crucial investments in our energy system and bring prices down for bill payers,” she said, adding that more funding was required to meet clean power targets.
Removing policy costs from electricity bills – where successive governments have chosen to finance building infrastructure through energy bills rather than through general taxation – would lead to the biggest possible reduction in bills, the report found.
Energy UK recommended moving policy costs from electricity to gas, and funding a small amount from general taxation, which it said could cut bills by £400 a year for homes with electric heating, while guaranteeing that no households would face increased costs.
On Tuesday, the government said up to 170,000 homes in England would get energy-saving upgrades, including insulation, double glazing, solar panels and heat pumps as part of its warm homes plan.
Local authorities and social housing providers began allocating £1.8bn in government support, with the funding targeted at low-income households and tenants in social housing.
Energy UK’s research came after the publication of a report that the lobby group had accused Ofgem of “unreasonable and unprofessional behaviour”, including contacting workers at energy companies outside working hours, such as at 6pm on Fridays.
The body complained in a letter to the regulator that its approach to compliance was discouraging innovation, according to the Financial Times, highlighting disagreements within the energy industry at a critical time for the sector.
