Ed Miliband denies his Net Zero policies are keeping Brits’ energy costs high – but he hints Rachel Reeves could scrap VAT on bills at Budget

Ed Miliband today denied the Net Zero drive was keeping Britons’ energy costs high as he defended green taxes on household bills.

The Energy Secretary has insisted it is ‘incorrect’ to suggest Labor’s proposal for a carbon-free electricity grid is increasing the burden on families.

But he has given hope of some relief to struggling households by hinting that Chancellor Rachel Reeves could scrap VAT on energy bills in next month’s budget.

The government is under fresh pressure over Mr Miliband’s green energy drive after household energy bills rose again this month.

On 1 October, the energy bill for the average household paying for gas and electricity via direct debit rose from £1,720 to £1,755 per year.

Britain’s largest energy supplier, Octopus Energy, has since warned that electricity prices will rise by a fifth over the next four or five years.

Both the Conservatives and the Reform UK have pledged to abandon Britain’s commitment to reach Net Zero by 2050.

And US President Donald Trump called on the Prime Minister to “drill, baby, drill” as he told Sir Keir Starmer to increase fossil fuel production to reduce energy bills.

A report this week by the government regulator, the North Sea Transit Authority, found there is an extra 1.1 billion barrels of oil and gas in the North Sea.

It is ‘incorrect’ to suggest Labor’s bid for a carbon-free power grid is increasing the burden on families, the Energy Secretary has insisted

In an interview with the BBC, Mr Miliband was questioned about how around 20 per cent of household energy bills come from policy costs, including green taxes and VAT.

Mr Miliband reiterated his view on Sunday that Britain needed to move away from the ‘rollercoaster’ of fossil fuel prices, despite admitting energy bills are currently ‘too high’.

He told the BBC: ‘We stand behind our promise to reduce bills by up to £300 by 2030.

‘Look, the reason why bills are so high is our addiction to fossil fuels. The price of gas is still 75 percent higher than it was before Russia invaded Ukraine.

‘There’s only one way to reduce bills, and that’s to move towards clean energy, home-grown clean energy that we control, so we’re not under the command of petro-states and dictators.’

Mr Miliband disputed that around 20 per cent of household energy bills were due to policy costs, including green taxes and VAT.

Told that the government had control over these areas and therefore chose to keep energy bills high, the Energy Minister replied: ‘No, I don’t think that’s right.

‘Perhaps the point you’re making, which is a fair point, is that we should always look at the balance between public spending and taxes, because we have to build that network somehow.

‘We have an outdated electrical infrastructure. Whether you turn to fossil fuels or green energy, you need to build this infrastructure.

‘Because we have increasing demand for electricity – artificial intelligence, all that stuff now – so we need to build that infrastructure now.

‘As a government we are always looking at what the right balance is between public spending and taxes.’

Mr Miliband pointed out that the new Sizewell C nuclear power station, which ministers said would reduce energy bills in the long term, was being built with public money.

Asked about recent reports that Ms Reeves could reduce the current 5 per cent VAT rate on energy, Mr Miliband said he would ‘not speculate’ on the Budget.

But he did not rule out the possibility of the Chancellor using his next financial package on November 26 to provide some relief on household bills.

‘The whole Government, including the Chancellor, understands that we face an affordability crisis in this country,’ he added.

‘We face a long-standing cost of living crisis that we need to address as a government.

‘We also face difficult financial conditions. And of course we look at all these issues.’

Claire Coutinho, the Conservative Party’s shadow energy secretary, linked Labour’s climate targets to the cost of living crisis.

“We said we would repeal the climate change target and we actually think Net Zero targets are a problem,” he told Sky News.

‘Firstly, it makes the cost of electricity incredibly expensive. Secondly, we are seeing jobs shifting from this country to countries abroad, which is actually worsening climate emissions.

‘Every time a business leaves for a coal-fired country, you’re making climate emissions worse and so we don’t think this company is doing what it says on the tin.

‘But at this point Net Zero targets don’t help change the climate, the economy or the cost of living for households.’

Ms Coutinho will not benefit if a Conservative government aims to achieve Net Zero after her party pledged to scrap the 2050 target earlier this year.

“We don’t think decarbonization is a bad thing, I think it’s important to care about pollution, but the targets right now are actually pulling you in the wrong direction,” he added.

‘If you want to decarbonise what you need to do is to get people to electrify their machines using electrical products, cars, homes, heating, industry.

‘So we don’t have a target.’

The Liberal Democrats’ energy spokesperson Pippa Heylings called on the Government to break the link between wholesale electricity prices and gas prices.

‘People are not seeing the benefit of cheap renewable energy because wholesale electricity prices are still tied to the price of gas,’ he said.

‘The Net Zero sector is growing three times faster than any other sector in the UK economy, creating huge opportunities for jobs.

‘The government needs to listen to our plan to break the link between gas prices and electricity costs so people can benefit from cheap, clean energy.

‘This will reduce people’s bills and generate public support for the investment we need in renewable energy.’