Over 100 MPs have urged Ed Milliband, the Secretary of State for Energy Security and Net Zero, to consider radical pricing reforms.
The MPs made their case in an open letter. It suggests cutting costs for households with relatively low power consumption, which tend to be low- and middle-income households. This could begin by reforming the standing charge that all customers pay before using any gas or electricity at all. At the current maximum set by the regulator, it effectively means that lower users pay more for each unit of energy.
The letter also suggests moving to a system of rising block tariffs. This is where the cost per unit increases as consumption increases, so the least energy-intensive households pay lower bills. It is thought this would also incentivise efficiency improvements. The overriding aim is to reduce the cost of living, however, as explained in the letter:
“We strongly support policies that will get energy bills down immediately so our constituents will feel the benefits […] Our constituents rank getting energy bills down as the No 1 way to improve their cost of living. For the poorest households, £1 in every £10 goes on paying their energy bills.”
The energy secretary is thought to be considering various ways of making pricing more progressive. Whatever happens, though, having an energy-efficient household will be important for keeping energy bills down. Get in touch with Xgas for an annual boiler service in Chester or the Wrexham area to make sure your boiler is working efficiently, safely and reliably.