News

Today, Chancellor John Healey delivered his first budget, in which the Government announced changes to energy policy. These range from removing gas standing charges on domestic energy bills, with a plan to do similarly to electricity charges, as well as reaffirming plans to renegotiate older renewables and nuclear onto new, long term contracts. There were also announcements to move hydrogen levies and the Gas Shipper Obligation off energy bills and into general taxation. UKERC Director Rob Gross and Co-Director Jess Britton reacted to the news.

Professor Rob Gross, Director of UKERC, said: “There is a lot to welcome in the budget. But it is worth asking whether all is being done to ensure that high gas prices do not lead to unnecessarily high power prices. Long-run contracts for older renewables and nuclear plants will help, but the risk is that they will have limited impact. Current proposals stop short of the full blown ‘pot-zero’ approach proposed by UKERC in the last energy crisis. Government needs to be ambitious, working with industry to swap volatile and subsidised prices for stable and long-term solutions, and doing so as quickly as possible.”

Dr Jess Britton, Co-Director of UKERC and Theme Lead for our Affordability, Justice and Economic Impacts Research, said:

“Scrapping gas standing charges is a welcome and largely progressive move, but it won’t take effect until 2027 at the earliest, so does nothing for bills this winter. Although many customers will save money as costs shift onto unit rates, low-income homes with high gas use are likely to pay more.

The £100 energy payment will help, but linking it to council tax bands rather than income means some struggling households miss out while many better-off ones receive it. The next step should be properly targeted support for those most at risk, and a plan to move remaining policy costs into general taxation.”