32
Accepted
The Government should further prioritise reducing electricity costs by removing appropriate policy costs from electricity...
Recommendation
The Government should further prioritise reducing electricity costs by removing appropriate policy costs from electricity bills and funding them through general taxation. This would improve affordability for households and businesses, strengthen incentives for the electrification of heat and transport, and avoid placing additional costs on households that are not yet able to switch away from gas. Shifting policy costs from electricity to gas bills may improve price signals in the short term, but would risk unfairly penalising households who face practical, financial or housing constraints on electrification. (Recommendation, Paragraph 130)
Government Response Summary
The government states it has already moved legacy costs from electricity bills to the Exchequer and taken other actions to reduce electricity costs. It is expanding the British Industrial Competitiveness Scheme, accelerating its £15 billion Warm Homes Plan with an uplift to the Boiler Upgrade Scheme, and providing an additional £100 million for the Warm Homes: Social Housing Fund.
Government Response
Accepted
Government Response
Accepted
HM Government
Accepted
The government recognises the importance of this, and has already taken action to reduce electricity costs, including moving legacy costs such as the Renewables Obligation to the Exchequer and cancelling the Energy Company Obligation and removing the associated VAT. Recent geopolitical developments, including events in Iran, underline the risks of continued exposure to volatile international fossil fuel markets. Investment in a more independent and resilient energy system, alongside targeted support, will help protect households from volatile gas prices and set the foundation for a more stable energy system that can bring down energy bills for good. As set out in April, families, schools, colleges, and small businesses will get more support to upgrade their homes and buildings and cut energy bills, in order to move further and faster on clean, homegrown power. The Government has announced that the British Industrial Competitiveness Scheme will be expanded to cover an extra 3,000 businesses, cutting electricity bills by up to 25% for over 10,000 businesses in total. Government will also accelerate its £15 billion Warm Homes Plan, backed by an uplift to the Boiler Upgrade Scheme grant, and provide an additional £100m of funding for the Warm Homes: Social Housing Fund.
Source
Committee
Environmental Audit Committee
Inquiry
The Seventh Carbon Budget
Report
8th Report - The Seventh Carbon Budget
04 Mar 2026
HC 1327
Timeline
Recommendation age
0.4 yrs
Report published
04 Mar 2026