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Energy companies have been urged to fully commit to Labor’s pledge Cut energy bills by £150 For the average family through the changes announced in the budget.
Rachel Reeves announced Several measures on fiscal event He said that this will give huge reduction to thousands of families. This included ending the Energy Company Obligation (ECO) scheme, which removed the charges that the program adds to energy bills.
The Chancellor also announced that 75 per cent of the cost of subsidies for older renewable energy projects, known as the “renewables obligation”, will be removed from electricity bills and included in general taxation.
Combined with the VAT savings from these two measures, the average household Should save £154 per yearThe Chancellor said.
But in the days after the budget, energy Secretary ed miliband Wrote to providers to express the Government’s “clear expectation” that “every penny” of savings from these changes should be passed on energy bill,
East Labor The leader said these savings should also be passed on to energy customers on fixed energy contracts, despite locking in an agreed rate for a fixed period.
Octopus Energy, which became the UK’s largest energy supplier in January, has confirmed it will automatically pass on the savings to both variable and fixed tariff customers from April 1.
Greg Jackson, CEO and Founder of Octopus Energy, said: “Octopus has long called for strategic cost reductions to help reduce bills, so we are pleased to see the Government taking action.
“These changes will bring a welcome relief to customers, and we will apply them to all our tariffs as soon as they come into effect, so no one is left out.
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“Octopus customers can rest assured – we will do all this automatically. We hope other suppliers will follow our lead so everyone can benefit.”
E.ON Next and British Gas have also confirmed they will take a similar approach with simple rate cuts for all customers from April.
E.ON Next said: “When these savings roll out in April, we will pass them on fully to all our customers. No ifs and buts. No small print. People are under pressure and they deserve to feel the benefits straight on their bills.”
British Gas said: “We welcome the Government’s moves to reduce energy costs as we have called for these charges to be moved into general taxation for some time.
“We will definitely ensure that all our customers benefit – including those on fixed-term tariffs.”
ScottishPower said it was “engaging closely with the government” on how the changes would be implemented, adding: “Our expectation is that the changes will apply to both variable and fixed-term tariffs from 1 April to ensure that all customers benefit”.
EDF and OVO have also committed to passing on the full benefits of the savings, but so far they have provided little detail about how this will work for customers.
money expert martin lewis All energy companies are being pressured to outline how they will implement the cuts, and are advising that all should take the same approach as Octopus, E.ON and British Gas.
Outlining how much the changes would save households, he said: “The price cap reduction will be delivered through a 3.5p/kWh (c.13%) reduction in electricity prices and a 0.35p/kWh (c.6%) reduction in gas prices, if everything else remains the same.”
“Everything else is unlikely to remain the same, as the April price range was expected to rise, so the actual pound reduction in your pocket will be slightly less than this, with the April price range currently predicted to be reduced by around 6% compared to January,” Money Guru reported on X.