Octopus Energy has called on Prime Minister Andy Burnham to implement two changes that it says could save nearly £200 on every household's annual electricity bill.
Market reform and levy shift
The energy supplier wants the government to reverse its decision not to overhaul the electricity market, arguing that expensive gas should have less influence on wholesale prices. It also proposes moving costs for government energy schemes from bills to general taxation, with higher earners bearing more cost.
According to independent analysis by FTI commissioned by Octopus, market reform could save typical households up to £114 a year. Moving levies could save an additional £75, bringing total savings to just under £195 annually.
Business and industry impact
Octopus estimates market reform could save businesses and industry an extra £6 billion a year, unlocking total savings of up to £83 billion by 2050.
The company says reforming Britain's electricity market would take two years and urges Burnham to act quickly.
Quotes and government response
Greg Jackson, founder and CEO of Octopus Energy, said: “The new Prime Minister has a golden opportunity to change the direction of energy bills, boosting electrification and slashing costs for families and businesses.
“It’s clear that market reform was rejected without a Plan B, and that the path we are currently on will see bills rise for years to come. Reversing that will put us in line with many OECD countries, cutting costs for everyone without sacrificing clean energy ambitions.
“Indeed, it’ll enable us to get more out of wind farms and pay less, and end the chaos which currently sees British batteries charge when they should discharge, interconnectors import electricity when we have surpluses and export when we have none to spare, and pay eye-watering amounts to gas plants to try to balance this.”
A Department for Energy Security & Net Zero spokesperson said: “The government took a decision last year not to pursue zonal pricing, and instead to reform the energy market while retaining a national price.
“We’ve cut VAT on electricity to give families breathing space. The Energy Secretary’s focus is working to bring bills down for good.
“We are also enabling energy companies to offer discounted energy bills to customers on windy days.”
Burnham's cost-of-living focus
Burnham, who entered Downing Street on July 20, has vowed to lead a “cost-of-living” government. He has already announced a VAT cut on energy bills.
