Government reportedly planning to introduce levy on gas bills for UK households

Energy bills could rise even higher for Britons Credit: Pexels/Gary Barnes

Households in the UK could face even higher energy bills amid reports the government is planning to introduce new charges on gas.

The government could cut the price of electricity and impose a levy on gas bills to fund low-carbon heating, according to The Times.

The newspaper said the plan, which is likely to start in 2023, could add £170 a year to gas bills.

The new strategy would be published before the Cop26 climate conference in Glasgow next month and there would be consultations before the plan is put in place.

Government to introduce new levies on gas in green energy strategy Credit: PA

The plans will reportedly include measures to boost the sale of heat pumps, which according to the GMB union costs £8,750 on average before VAT.

A spokesman for the Department for Business, Energy and Industrial Strategy told the Times: “We’ll set out our upcoming heat and buildings strategy shortly. No decisions have been made.”

On Monday, Prime Minister Boris Johnson said Britain was aiming to produce “clean power” by 2035 as part of the country’s goal of reaching net zero carbon emissions.

And earlier this week, Business Secretary Kwasi Kwarteng insisted that by decarbonising the UK’s power supply, the government would ensure that households are less vulnerable to swings in fossil fuel markets.

Minister of State at the Department of Business, Energy and Industrial Strategy Kwasi Kwarteng Credit: Aaron Chown/PA

Rising wholesale energy costs have led to industry leaders warning their factories could stop production or permanently close.

Andrew Large, director-general at the Confederation of Paper Industries, and

Speaking to Channel 4 News, Gareth Stace from UK Steel - who attended a meeting with the business secretary and other industry leaders on Friday afternoon - insisted the worst-case scenario would see steel plants closing for good.

He told ITV News: "If the government doesn't take any action, then basically what we will see for the steel sector is more and more pauses of production at certain times of the day.

"And those pauses will become longer."

UK customers could see their energy bills rise by 30% next year, according to predictions by analysts.

Research agency Cornwall Insight said volatile gas prices and the potential collapse of even more suppliers could push the energy price cap to around £1,660 in summer - 30% higher than the record £1,277 price cap set for winter 2021-22, which started in October.