Energy bills will fall by 7% from April, after Ofgem confirmed the price cap will drop by £117 following action taken by the UK Labour Government to cut household bills.
Ofgem said it was “a significant reduction in the cap level” and that “recent government budget interventions relating to policy costs are the main cause of this reduction.”
The reduction applies automatically from 1 April, including to customers on fixed tariffs and pre-payment meters, so no-one needs to apply. The regulator has also confirmed that standing charges will fall slightly this spring and is piloting lower standing charge tariffs to give low-usage households more choice.
Luke Myer MP said the reduction would be welcome news for families across Middlesbrough South and East Cleveland who have faced years of volatility driven by global gas markets. Energy bills shot up in 2022 following Putin’s invasion of Ukraine, and have remained high. Wholesale gas prices remain around 40% higher than historic levels, which is why Labour is investing in cheaper clean power alternatives.
The change sits within a wider package of cost-of-living measures being delivered by Labour this year. Nearly six million households have received the £150 Warm Home Discount this winter. From April, 2.7 million workers will see a pay rise through increases to the National Living and Minimum Wage. Rail fares have been frozen, prescription charges are being held under £10, the State Pension will rise by 4.8%, and the two-child limit on Universal Credit will be removed – benefitting over 20,000 children on Teesside. Free breakfast clubs are also continuing to roll out in primary schools, helping working parents with childcare costs.
Alongside immediate bill reductions, investment continues in the Warm Homes Plan – a £15 billion programme to upgrade up to five million homes by 2030 – and in homegrown clean power through Great British Energy, which is already cutting bills for schools and hospitals and supporting thousands of skilled jobs, including in industrial areas like Teesside.
Luke Myer MP said:
“Energy bills have been too high for too long, and families here on Teesside feel that pressure every month. The £117 reduction from April is welcome and it’s happening because we made deliberate choices to take costs off bills and fund that fairly.
But I’m clear this must be a step, not the destination. We cannot stay exposed to fossil fuel markets we don’t control. The long-term answer is insulating homes properly, generating more of our own clean power, and creating good industrial jobs here on Teesside while we do it. That’s how we bring bills down for good and give families the stability they deserve.”
Energy Secretary Ed Miliband said:
“This government is keeping our promise to bring down bills for good because we understand that the affordability crisis is the number one issue for people – and we are determined to act.
Today’s fall in bills is only happening because the government acted in the Budget, asking some of the wealthiest in our society to pay their fair share, so we could help fund this bill reduction.
We are determined to go further and end the era of high bills for good, with our clean energy mission to get off the fossil fuel rollercoaster, and by delivering our Warm Homes Plan, the biggest home upgrade scheme in British history.”