‘Some necessary relief’: Ed Miliband welcomes energy cap cut amid ‘affordability crisis’ as household bills set to fall by £117
Households in England, Scotland and Wales will see their average annual energy bill fall by 7 per cent in April
Ed Miliband has told LBC today’s cut in energy bills is a “necessary step” to help struggling families across the UK.
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Speaking to LBC’s Nick Ferrari, the Energy Secretary vowed Labour will do everything they can to bring the cost of living down and rejected suggestions today’s cut isn’t enough.
Households in England, Scotland and Wales will see their average annual energy bill fall by 7 per cent in April, Ofgem announced on Wednesday.
Between April and June, the typical annual dual fuel bill will fall to £1,641 - down from the current £1,758 cap.
Mr Miliband told Nick: “This will make a difference to people. It's £117 across the year. We said at the election we would cut bills by up to £300 pounds by 2030.
“We made that promise for a reason, which is we recognise the affordability crisis that people face. There is more to do.
“We've already done some other things as well, like the Warm Home Discount, which we've extended to nearly three million more families, those on means-tested benefits. But there's other things coming down the track.”
Labour is also making efforts to cut energy bills for businesses, Mr Miliband added - despite business leaders warning rising costs are causing closures across the country.
“One of the things that we are doing is reforming,” he said.
“We previously had a completely unregulated market in so-called third-party intermediaries which were the kind of brokers for small business energy costs, and we are now regulating them through Ofgem to get a better deal for small businesses.
“But I will say to you very straight, there's further to go on business energy costs. And it's something that I talked about with the Chancellor, with the Trade Secretary, Trade and Business Secretary and others across government and indeed with business itself.”
When pressed on Labour’s decision not to issue more oil and gas licenses, Mr Miliband insisted the only way to bring bills down is to produce more “homegrown clean power” that Brits own themselves
He said new licensees will “make no difference to bills.”
“Those people who come on your programme and say let's just drill for more oil and gas, it will take money off. It won't.
“Prices are set on the international market. Why are gas prices 40% higher than they were before Russia invaded Ukraine?
“Because they're set on the international market.
“The only answer to this is homegrown clean power that we control, wind, solar, nuclear.
“That is the answer. Homegrown energy independence, not being dependent on the petrostates and dictators.”
The energy price cap is the typical sum most households pay for gas and electricity when paying by direct debit.
It means that if Brits use more energy, they will pay more.
The price cap limits the amount suppliers can charge per unit of energy and is revised every three months.
Prices will vary depending on where you live, how you pay your bill and the type of meter you have.
Ofgem said the change to the energy price cap amounted to a reduction of around £10 a month for the average household using both electricity and gas.
For an average household paying for gas and electricity by direct debit, the overall bill will be £1,641 per year.
Tim Jarvis, director general of markets at Ofgem, said: "Today’s announcement will be welcome news for many households.
"Wholesale energy prices have fallen in recent months, and we’re investing in our network to safeguard the future energy system.
"The main driver of today’s reduction is the change to policy costs announced by the Chancellor in the budget.
"More households are choosing time-of-use tariffs that offer cheaper off-peak rates, and suppliers are offering a wider range of products, including deals with savings at evenings or weekends.
"The price cap protects households from overpaying for energy, but it’s a safety net.
"Last year, consumers on fixed deals paid around £115 less than the cap on average, so we’d encourage people to speak to their supplier about the options available and consider whether a different tariff or payment method could help bring their bills down further."
Responding to the energy price cap drop, Prime Minister Sir Keir Starmer exclusively told LBC: “Four years ago, Russian tanks rolled into Ukraine. Almost overnight, your energy bills soared.
“Today, because of the action we took at the budget, the energy price cap is coming down by £117. That means lower bills from April - but I won’t stop until they’re down for good.“Of course, the war is still with us. And we have learned a hard lesson: events overseas do not stay there. They reach directly into our own lives – and into our own homes. They arrive month after month through the letterbox, stamped across rising energy bills.
“For too many families, that pressure has not eased - it still hangs over daily choices and late-night worries. I talk to people across the country who worry the cost-of-living crisis will never truly lift, that this is simply the new normal.
“Now, I understand why people feel like that. I remember our family sitting around the kitchen table, working out if we could make ends meet each month.
“That’s why my government is tackling the cost of living crisis head-on, and challenging the belief that we can’t turn things around. And restoring that simple promise we all rely on: that if you work hard, you should be able to get on.
“And I meant it when I promised to bring bills down.
“That’s what today’s announcement is all about. Because of the actions this Labour government took at the last Budget, the price cap on energy bills has come down by £117. That means lower bills for millions across the country this April.”