Four days ahead of the Autumn Statement, the Government has announced proposals it says will save the average British household £50 on their energy bills.
We’ve long been calling for sky rocketing energy bills to be brought under control. The message seems to have gotten through to the Government. Today Ed Davey confirmed that they would take action by cutting back on the levies we all pay for on our bills.
The Warm Home Discount will still be available for vulnerable households, but the cost of this will now be met by the Government via a rebate on your energy bill for two years. Changes will also be made to the Energy Company Obligation (ECO), an insulation scheme, so that it can be delivered more cost-effectively. These are both changes we’ve been calling for as part of our ‘Cut them down, George’ campaign.
As we discussed last week on Which? Conversation, it’s right to refocus the Energy Company Obligation so that it gives greater priority to low-cost measures, such as loft and cavity wall insulation. But the suppliers must now commit to greater transparency and to getting their costs down, fast.
The Big Six make promises
All of the Big Six energy suppliers have confirmed that they’ll pass these savings on to their customers. British Gas, for example, will cut its gas and electricity prices by 3.2% in January 2014 for an average dual fuel saving of £53. Although this does follow its price rise of an average £123.
EDF and Npower have said they won’t increase prices before 2015, except if wholesale prices go up. Npower will also seek to reduce the 10.4% price rise it implemented over the weekend (EDF hedged its bets by announcing a lower 3.9% rise). SSE and Scottish Power have said they’ll pass on the full £50 saving. And Eon, which hasn’t announced a price rise this year, said the government’s changes will mean their customers will pay less next year than would’ve been the case.
We still need major reform
It’s about time the Government started getting the cost of energy under control and this is a welcome step in the right direction for everyone who’s struggling with the increased cost of living. But, ultimately, bills are still rising.
This is why we’re still calling for major reform of the energy market to make it truly competitive. We also need to see a comprehensive review of the Government’s energy efficiency policies. And any other policy costs that are passed onto our bills, be it smart meters or the carbon floor price, must be rigorously scrutinised and kept low.
What do you think about the Government’s proposals to cut bills by an average £50? Will they make a difference to your energy budget?