Energy bills to fall by £117 for millions of British households from April
ITV News Consumer Editor Chris Choi explains what Ofgem's latest announcement means for households.
Energy bills will fall by £117 for millions of British households from April, Ofgem has said.
Ofgem announced on Wednesday that the energy price cap will fall by 7% from April 1 for a typical household in England, Scotland and Wales.
The regulator’s price cap will drop from the current £1,758 to £1,641 - a reduction of around £10 a month for the average household using both electricity and gas.
Chancellor Rachel Reeves said in November that £150 would be cut from the average household bill from April by scrapping the Energy Company Obligation (Eco) scheme introduced by the Conservatives in government.
Customers have been warned not to expect a straight £150 discount on their bills, and that the cut will depend on the size and type of household and how much energy it uses.
Whilst he welcomed the changes, Prime Minister Sir Keir Starmer admitted he knows there is still "more to do" to bring down the cost of living.
“I promised to bring bills down and I meant it. And today - because of the actions this government took at the last budget - the price cap on energy bills has come down by £117," he wrote in a statement responding to the energy price cap drop.
“That means lower energy bills for millions across the country, but I know there is more to do and my government is pulling every lever to bear down on the cost of living and protect the pound in the pockets of working people.”
The Chancellor Rachel Reeves also emphasized the work being done to "bear down" on the cost of living, adding that her wider economic plan was "creating the conditions for growth and investment in every part of the country".
'We are determined to make sure that bills continue to fall', Energy Secretary Ed Miliband says
When asked why bills hadn't fallen by £150, his cabinet colleague - Energy Secretary Ed Miliband - said the government had taken £150 of costs of customers bills, but people might not see the full amount in their bank accounts because of "some investment in the network".
"We've taken £150 worth of costs of bills," he said.
"But as always with the energy price cap, there's other things going on. There's some things that driving bills up, some things that are driving bills down.
"This price cap has some investment in the network. That's important for the gas and electricity network to keep the lights on to give us energy security."
The energy secretary also insisted that the transition to a more sustainable energy supply would not mean bills rising again.
"No, we're determined to make sure that bills continue to fall," he said in an interview on Wednesday morning.
"We said that we'd cut bills by up to £300 by 2030. That remains our commitment."
On Ofgem's latest announcement, the regulator's director general of markets, Tim Jarvis, 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.
Subscribe free to our weekly newsletter for exclusive and original coverage from ITV News. Direct to your inbox every Friday morning.
“The main driver of today’s reduction is the change to policy costs announced by the Chancellor in the budget.
“Our focus at Ofgem remains on bearing down on the costs within our control, and unlocking the investment needed to support the transition to a more stable energy system over the longer term.
“We’re also seeing encouraging signs of greater engagement and competition, with switching increasing by almost 20% year on year.”
If you are struggling with your energy bills or would like advice, click here: Greener & Cleaner Community Hub
From Westminster to Washington DC - our political experts are across all the latest key talking points. Listen to the latest episode below...