Our response to UK Government changes and removal of VAT from electricity bills

With a new prime minister, energy minister and the removal of VAT from electricity bills, it’s been a big week for energy news.

UK Government will remove VAT from electricity bills from October

With many households continuing to feel the effects of higher energy costs and wider cost of living pressures, it’s positive to see the UK Government taking immediate action to take pressure off electricity bills by removing VAT from October.

Removing VAT from electricity bills will not only provide some financial relief for households but also help narrow the gap between electricity and gas prices. As the UK moves towards a low carbon energy system, ensuring electricity is competitively priced is key to drive uptake of technologies such as heat pumps and batteries.

Whilst a step in the right direction, it is crucial that the UK Government now moves quickly to deliver the Warm Homes Plan. Our recent report, ‘Flexible Futures’, found that heat pump users on smart tariffs can save around £330 a year on average, whilst households using a combination of low carbon technologies can cut heating costs by up to 80% compared with gas alone.

Expanding access to these technologies will help bring down bills for the long term whilst shielding households from future energy price volatility.

Miatta Fahnbulleh becomes Secretary of State for Energy Security and Net Zero

Miatta Fahnbulleh takes on the role of Energy Minister at a critical moment. Yesterday’s announcement on removing VAT from electricity bills is positive news for households and demonstrates a commitment to tackling energy affordability. However, with many people still facing high energy costs and another challenging winter ahead, we look forward to working with her and the UK Government to deliver further measures that lower bills, improve energy security and help communities across the UK participate in the clean energy transition.

With a difficult winter approaching, it is vital that the Warm Homes Plan and Local Power Plan are delivered at pace and scale. These programmes have the potential to make homes warmer and ensure communities in every postcode can benefit from the transition to clean energy. Our recent ‘Flexible Futures’ report found that households can significantly reduce their energy costs through low carbon technologies and smart tariffs, highlighting the importance of making these solutions more accessible and easier to navigate.

The months ahead provide a critical opportunity to turn policy ambition into practical action. Drawing on decades of experience delivering government backed home and community energy efficiency programmes, we stand ready to support the delivery of the Warm Homes Plan and Local Power Plan, helping ensure support reaches households and communities at the scale and speed needed ahead of winter and beyond.

Andy Burnham becomes Prime Minister

We congratulate the new Prime Minister and look forward to working with the UK Government to help deliver a cleaner, more secure and affordable energy future.

With a difficult winter of high energy bills approaching, delivering the Warm Homes Plan and Local Power Plan at pace and scale will be vital to lower people’s energy bills, reduce our reliance on volatile fossil fuel markets and ensure communities in every postcode benefit from the clean energy transition.

By providing long-term certainty and building on proven delivery models, the UK Government can help ensure more people benefit from warmer homes, lower energy bills and a cleaner energy system.