The overall energy bill has indeed reduced £117 since the last price cap, coming down to £1,641 from £1,758. Gas bills are down £44 and electricity bills are down £73, all figures including VAT.
However, when Labour came to power in July 2024, the price cap for July-September 2024 was £1,568 so overall energy bills since Labour came to power are up £73, moving in the opposite direction to their original £300 reduction promise….
…overall direct fuel costs have fallen £63 which is a real reduction in energy bills. This can be attributed to falling gas and carbon prices, neither of which Labour can claim credit for.
Shuffling costs from energy bills to general taxation has led to a headline reduction in bills of £127. However, this is not a real reduction because we now just pay those same costs through our tax bills instead of energy bills. The government also plans to return the ROC element of these costs back on to energy bills in April 2029.
There is a total increase of nearly £93 across CfD and FiT subsidies, network costs and the Capacity Market. These are real increases in the cost of energy, mostly driven the hidden costs of renewables, over and above the direct subsidies they receive.
The changes to other costs are relatively modest.
We can conclude that Labour’s original pledge to reduce energy bills by £300 was a lie. Moreover, their promise to cut energy bills by £150 in April was a con. The government have done nothing to address the underlying structural reasons for high energy bills. In fact, they have done quite the opposite because without shuffling ROC and ECO costs on to taxation, bills would have gone up even though fuel costs have fallen. They are trying to kid us with an elaborate shell game.
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