Concern over Budget energy bill measures

Any cuts to domestic energy bills would need to be recovered from elsewhere in the energy value chain to maintain levels of investment, experts have warned.

Commenting after Ofgem unveiled its January household energy price cap, Craig Lowrey – principal consultant at consultancy firm Cornwall Insight – said: “There has been widespread speculation as to whether the Chancellor could potentially reduce energy bills – whether through removing VAT or adjusting levies. However, the reality is that this is a zero-sum outcome.

“These costs will still need to be recovered, whether through bills or through taxes, as the pipes, wires, and networks that keep the lights on still need investment as we move to a cleaner, more secure energy system.”

Dhara Vyas, chief executive at trade body EnergyUK, added: “While any reduction in bills would be welcome, it should not be at the expense of the long-term interests of customers – or indeed our economy – or in place of a proper strategy to tackle affordability and debt through targeted support.”