Blow For Burnham As Energy Price Cap Rise Wipes Out His Cut To Electricity Bills

Energy bills are set to soar by £60 a year – wiping out Andy Burnham’s move to bring down electricity charges.

Ofgem announced that the energy price cap is to increase by 4%, meaning the typical dual fuel annual bill will hit £1,723 – the highest level in three years.

It will mean the average monthly bill for households will increase by £5 a month.

That cancels out the £45 a year saving Burnham announced in July when he unveiled plans to remove VAT from electricity bills from October.

It is a bitter blow for the prime minister, who has made tackling the cost of living crisis his top priority since entering Downing Street.

The price cap rise also calls into question Labour’s pre-election pledge to cut energy bills by up to £300.

Energy secretary Miatta Fahnbulleh blamed the turmoil in the Middle East for the rise in bills.

She said: “Families will be understandably concerned about the cost of energy bills this winter, which is being driven up by the Iran War.  

“Energy is an everyday essential and it needs to be affordable for everyone, which is why we have cut VAT on electricity bills from October, to give families some breathing space.  

“This has limited the rise in the price cap and follows the £150 in costs we removed from bills earlier this year, and we will keep looking at what more we can do to protect families from unaffordable bills.” 

Lib Dem energy spokeswoman Pippa Heylings said: “This latest rise in the price cap has wiped out the small savings from Andy Burnham’s cut of VAT on electricity bills, proving that continuity Starmerism will keep families stuck in a financial mire.

“The prime minister must wake up to the scale of the challenge and accept that bold change is needed to bring bills down.”

TUC general secretary Paul Nowak said the rise in bills would be “a hammer blow for those struggling to get by”, and called for a windfall tax on banks to bring down the cost of living.

He said: “The government is going to have to keep going on measures to boost living standards – starting with a tax on banks’ enormous profits to cut energy bills for the majority of households.

“It’s the right thing to do. Banks are raking it in while many up and down the country are struggling to get by – they can well afford to pay more tax.”   

Jonathan Marshall of the Resolution Foundation think-tank said another “cost of living crunch” is looming.

He said: “This gas-led rise in the energy price cap will land just as boilers are turned back on, pushing family bills up at the worst time of the year.

“Another jump in the new year looks likely, meaning energy bills in January are set to be a fifth higher than the start of this year.

“This underscores the need for the government to have targeted support with energy bills designed, costed and ready to switch on as soon as January, in order to protect households from another cost of living crunch.”

Shadow energy secretary Claire Coutinho said: “Labour promised to cut energy bills by £300, but they have gone up by nearly £400 instead.”

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