The new Prime Minister is expected to make a new cost of living statement
Andy Burnham is set to become Prime Minister on Monday and one of his first acts could be to cut £130 a year from energy bills. Mr Burnham is expected to make announcements on the cost of living in his first statements as Prime Minister, having promised to cut the cost of essential bills.
Thinktank Nesta has drawn up a proposal which is reported to be under consideration by Mr Burnham and his team. The proposals, according to the Guardian, would remove some levies from the bills people currently pay and cut the average bill by £130.
At the minute, your bills include an amount that goes towards boosting green energy projects. That could instead be moved into general taxation. Electricity in particular would become cheaper, and it would cost less to heat a home using an electric pump than a gas boiler.
The moves would also reduce or remove standing charges – the amount you pay every day, whether you use energy or not – and cut tariffs. You currently pay 29p a day just for having a gas supply – whether you use any gas or not.
Andrew Sissons, director of Nesta’s sustainable future project, said: “By combining a zero-taxpayer-cost reform of the gas standing charge with these targeted tariff cuts, the government can deliver around £130 a year in immediate financial relief for the majority of UK households, while making clean heating the cheapest option on the market.”
Nesta’s proposal also calls on the Government to wipe out people’s electricity bill debts – at a cost of £2.7billion – and provide debt relief for two million households. That would cut bills for people currently paying off debts by another £29 a year.
The changes would see homes that use more gas pay more, while homes that use less energy – and favour electricity – would pay less.
Energy bill caps have just gone up by 13%, and while people have yet to feel the full impact thanks to the summer heat, when heating goes on in the winter, bills will be significantly higher.
