Household energy bills could be cut by more than £270 a year under a new set of practical reforms outlined in a report published by Good Energy.
The report comes ahead of another increase in the energy price cap, with the typical annual bill expected to reach £1,663 from 1 July — 46% higher than in 2019. It also comes as a record 2.36 million people live in fuel poverty.
Titled ‘Rewiring the Market: How to Tackle the Hidden Causes of High Energy Bills’, the study proposes a new package of measures that could reduce typical household bills by an additional £158 a year.
The proposals follow on from the changes made by the Government at the last Budget and, combined, would reduce the annual bill for an average UK household by £272 a year, bringing the Government within much closer reach of its Manifesto pledge to reduce household bills by £300 by 2030.
Good Energy says there are three practical steps ministers could take before this winter to make bills cheaper:
- Move policy costs off energy bills and into general taxation
- Break the link between gas and electricity prices
- Incentivise clean energy investment
Nigel Pocklington, Chief Executive of Good Energy Group, said:
“Rising energy bills are becoming a financial nightmare for millions of households across the UK, and a major brake on our prospects of growing our economy. Over the past five years, we have witnessed a series of energy shocks due to conflict abroad, proving that our current system is neither fit for purpose nor structured in a fair way for households to pay for their energy.
“We need to urgently reform the way the market operates to deliver and incentivise a cleaner, more affordable energy system. The priority now should be turning that into action. The next Prime Minister must set out a clear plan for how Britain will move away from high gas prices and bring bills down for good.
“The Labour Government still has time to deliver on its ambition to cut household bills, but doing so requires urgent action to decouple electricity prices from gas, so consumers can fully benefit from lower-cost, homegrown clean energy. Our proposal sets out a practical package to achieve this. The report demonstrates that credible steps can be taken now to break the link with gas and reduce bills, while keeping the need for longer-term reform firmly on the political agenda.”
Chris Galpin, Senior Advisor at E3G said:
If government is serious about tackling the cost-of-living crisis, removing levies from electricity bills needs to be the first step. It’s absurd that the UK still taxes homegrown renewable electricity more than imported fossil fuels. Removing levies from electricity bills would enable the government’s Clean Power mission to achieve real energy bill reductions”
Adam Bell, Partner, Stonehaven said:
“A second gas price crisis within five years shows that we cannot and must not tolerate its role in setting the price of electricity any longer than necessary. This report shows that the Government’s first stab at this reform is inadequate and outlines the need to take gas out of the market entirely.”
