THE next prime minister could make good on Labour’s General Election pledge to cut people’s energy bills through three key measures, according to a new report.
The paper, from the energy supplier Good Energy, estimates that the average UK billpayer could be saved £270 per year in total.
Labour came to power in July 2024 pledging to cut energy bills by £300. At the time, energy watchdog Ofgem’s price cap was set at £1568 for the average household using both electricity and gas. From July 1 2026, that will be £294 (or 19%) higher, at £1862.
The new Good Energy report, published on Monday, argues that the next Labour prime minister – expected to be Andy Burnham – can cut bills through three key routes:
- Move policy costs off energy bills and into general taxation. The report says shifting the remaining Renewables Obligation, Feed-in Tariff and Warm Home Discount costs onto general taxation would cut the average household bill by £76 a year.
- Break the link between gas and electricity prices. It proposes taking gas-fired power stations out of the wholesale electricity market and placing them into a strategic reserve so gas no longer sets electricity prices.
- Incentivise clean energy investment. It calls for cheaper finance for renewable energy projects, arguing lower borrowing costs would reduce electricity bills over time.
The £270 figure includes savings Good Energy says have already been delivered through government policy, including the 2025 Budget decision to move 75% of the Renewables Obligation levy off household electricity bills and into general taxation. The report estimates its own proposals would save a further £158 a year for a typical two-bedroom semi-detached home.
Analysis from the firm further estimated that energy reform would cost £11.83 billion annually but deliver £17.53bn in annual savings to billpayers, which it says could help ease inflation by around 0.65 percentage points.
Nigel Pocklington, the chief executive of Good Energy Group, said: “Rising energy bills are becoming a financial nightmare for millions of households across the UK, and a major brake on our prospects of growing our economy.
“The next prime minister must set out a clear plan for how Britain will move away from high gas prices and bring bills down for good. The Labour Government still has time to deliver on its ambition to cut household bills, but doing so requires urgent action to decouple electricity prices from gas, so consumers can fully benefit from lower-cost, homegrown clean energy.
“Our proposal sets out a practical package to achieve this. The report demonstrates that credible steps can be taken now to break the link with gas and reduce bills, while keeping the need for longer-term reform firmly on the political agenda."
Adam Bell, a partner at consultancy firm Stonehaven, said: “A second gas price crisis within five years shows that we cannot and must not tolerate its role in setting the price of electricity any longer than necessary.
“This report shows that the Government's first stab at this reform is inadequate and outlines the need to take gas out of the market entirely."
Good Energy has written to Chancellor Rachel Reeves and Energy Secretary Ed Miliband calling for urgent electricity market reform.
