- Bills will drop by 12.3 per cent from £1,928 to £1,690 from April 1
Rishi Sunak has said that the biggest fall in the energy price cap since Russia invaded Ukraine is evidence that Britain has ‘turned a corner’.
Bills will be reduced by £238 a year for the typical user, bringing relief to millions of families.
The drop by 12.3 per cent brings the cap for average use down from £1,928 to £1,690 from April 1.
It will be the biggest fall in bills since the international energy crisis triggered by Russia’s invasion of Ukraine in February 2022 – and a further cut is predicted in July.
The move will help bring down costs, putting money back into people’s pockets. Mr Sunak yesterday said that the public are ‘feeling that the economy has turned the corner’ and ‘things are getting better’.
Answering questions after a speech at the Welsh Conservative conference in Llandudno, he said: ‘Inflation has been more than halved, mortgage rates starting to come down, wages have been rising for six, seven months in a row now. We just saw today… energy bills significantly down… And that is why it is so important that we stick to our plan.’
The Prime Minister said: ‘There is a palpable sense out there, regardless of what Keir Starmer might want to say because he’s always keen to talk down Britain, I can tell actually on the ground people are, since the beginning of this year, feeling that the economy has turned the corner. They do see those green shoots. They can see that things are getting better.’
While the cost of each unit of gas and electricity is falling, the amount of the bill going towards the controversial standing charge, which has been likened to a poll tax, is going up. The figure, which every household must pay each year before turning on the lights or central heating, is rising £31 to £334.
This is largely because companies are being allowed to raise money to cover losses created by the collapse of several firms.
It is also used to fund the roll-out of smart meters and the infrastructure needed for the switch to renewable energy – wind, solar and nuclear.
These costs are expected to continue to rise, and the energy industry watchdog Ofgem says it is unlikely that bills will fall back to the pre-crisis levels of £1,000-£1,200 a year.
Ofgem chief executive Jonathan Brearley said it is ‘good news’ that the price cap is well below the peak of £2,500 – based on the Government’s Energy Price Guarantee subsidy – of a year ago.
But he said: ‘There are still big issues that we must tackle head on to ensure we build a system that’s more resilient for the long term and fairer to customers.’
Richard Neudegg, director of regulation at Uswitch.com, said: ‘After more than two years of eye-watering energy bills, hard-pressed households may finally dare to hope that the worst is over.’
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
