UK householders 'will see energy bills drop by £400' under new Labour government

Ed Miliband, Labour's Secretary of State for Energy Security and Net Zero, during a visit to a Zero Bills home in Stafford with Octopus Energy, while on the General Election campaign trail
-Credit: (Image: PA)


UK householders are set to see their energy bills drop by £400, the new Labour government has pledged. Sir Keir Starmer had previously committed to cutting gas and electricity bills by that amount if his party won the General Election.

This announcement coincided with the news that average bills are set to go down by 7 per cent from July, following Ofgem's decision to lower its price cap due to falling wholesale prices. Labour says its reductions won't come via the price cap, which it says is just a temporary fix, but will be as a result of establishing Great British Energy, a publicly-owned company intended to generate revenue for taxpayers.

Labour says it aims to make the electricity grid carbon-free by 2030. However, some experts and the Conservatives, who aimed for a date of 2035, doubt this is possible. They point to challenges such as the need for many new renewable energy sources, upgrading the grid, supply chain limits, and the risk to oil and gas jobs if the 2030 target is kept.

READ MORE:

Labour says it plans to tackle this challenge with its Green Prosperity Plan, which includes creating GB Energy and the National Wealth Fund. They believe this will lower consumer bills and provide cheap, low-carbon electricity, aiming to create 650,000 jobs by the next election.

Its manifesto prioritises green policies for growth, prosperity, and climate action. It aims to spend £23.7bn on green measures in the next parliament, focusing on creating 650,000 jobs by 2030, renewing industry, lowering bills, and ensuring secure clean energy supplies.

The party has also promised to reward clean energy developers with a British Jobs Bonus, offering up to £500 million per year starting in 2026. This incentive aims to encourage firms to provide good jobs, fair terms and conditions, and build their manufacturing supply chains in the UK's industrial regions, coastal areas, and energy communities.

According to Labour's goals, this plan would result in about five times more offshore wind, three times more onshore wind, and six times more solar power.

Andy Kerr, founder of BOXT, said: "The significant energy challenges facing the new UK government have been thoroughly discussed and debated in the months leading up to the election. A persistent issue remains balancing energy affordability, supply security, and achieving net zero carbon emissions. Underpinning these challenges are complex factors such as grid capacity, planning permissions, market reforms, green subsidies and taxes, supply chain pressures, and the necessity to ensure a fair transition to a net zero economy.

"Labour has stated that their main goal for the energy industry is to make the UK a clean energy superpower. They see achieving net zero as a significant opportunity for growth and plan to collaborate with the private sector to increase the number of completed projects. Specifically, Labour aims to double onshore wind, triple solar power, and quadruple offshore wind by 2030.

"In light of these ambitions, there is a hope for stability and clear direction from the government, ensuring that the energy industry can move forward and achieve its targets. Clear policies, consistent support, and streamlined regulatory processes will be crucial in providing the certainty needed for long-term investments.

"By fostering a stable environment, the government can help unlock the full potential of renewable energy, driving innovation, creating jobs, and ensuring a sustainable and secure energy future for the UK. This in turn should give consumers confidence in renewable energies as they see positive changes being made."

Get all the latest money, shopping and DWP stories on BirminghamLive's Money Saving Group on WhatsApp. Join our dedicated community for up-to-date news, helpful tips and essential information. You can also get a daily round-up and breaking news updates by signing up to our Money Saving Newsletter with a selection of top stories on benefits, pensions, finances, bills and shopping discounts.