Andy Burnham is being urged to adopt a clean power plan that could cut household energy bills by £500 a year after vowing to give families “breathing space” on the cost of living.
New analysis from energy giant SSE says the best way to reduce bills is to speed up Britain’s shift to clean power and encourage households and businesses to switch from fossil fuels to electricity.
The report finds that greater use of electricity, through measures such as electric vehicles and heat pumps, could cut the average household bill by around £500 by 2040, rising to roughly £1,000 a year by 2050.
Switching to an electric vehicle alone could reduce a family’s overall energy costs by about 30 per cent, the analysis suggests, with a heat pump delivering a further 5 per cent saving.
SSE argues those gains could arrive even faster if levies and other policy costs were stripped out of electricity bills altogether, so that consumers choosing to electrify are not penalised.
Martin Pibworth, SSE’s chief executive, said generating more clean power domestically was the “biggest lever” the next prime minister would have to bring bills down, arguing that too many households remained exposed to volatile gas prices they cannot control.
Polling commissioned by the energy giant suggests Burnham would find public appetite for the approach. It found the cost of living remained voters’ top concern, ahead of immigration, the economy and health, with more than eight in 10 people backing greater UK energy production to cut reliance on other countries, with majority support specifically for expanding solar and wind.
The intervention comes days after Burnham used a keynote speech to signal his own determination to move fast on the cost of living crisis once he takes office.
With household energy bills rising again from this month, the cost of living has become a defining political issue, intensifying pressure on him to act. Ofgem has announced a 13 per cent rise in the energy price cap from 1 July – adding an estimated £221 to the average annual bill.
Speaking at the People’s History Museum in Manchester last week, Burnham told the audience he wanted to give households “breathing space” on the cost of living as soon as possible, while insisting any action would stay within current fiscal rules.
His allies want him to announce a package of measures to ease the cost of living crisis as soon as he becomes prime minister.
They are pressing him to unveil three significant measures: a one-year freeze on private rents, a cap on bus fares, and a plan to bring down energy bills.
Among the ideas are proposals to strip green levies out of household energy bills, funding the move through changes to the tax system, with reform of capital gains tax understood to be the most developed option under discussion.
The intention is to shift the cost of subsidising renewable schemes off consumer bills and onto general taxation, without resorting to the kind of broad tax rises that have proved politically damaging in the past.
While the proposals under consideration focus chiefly on removing levies from bills, SSE’s analysis suggests this kind of reform alone will not be enough to deliver lasting savings, and that the bigger prize lies in accelerating clean power generation and switching consumption from gas to electricity.
The report notes that around 70 per cent of the rise in domestic energy bills since 2017 has been driven by global commodity prices and inflation, underlining Britain’s continued exposure to volatile international gas markets.
SSE’s analysis extends beyond households. It proposes extended support for small and medium-sized businesses, including reform of the climate change levy and how network costs are shared. It estimates such changes could save a typical pub or restaurant about £1,000 a year.
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