Reeves’ £150 cut in energy bills will be nuked by Sizewell costs, ex-Labour donor claims
Rachel Reeves’ pledge to cut £150 off household energy bills could be canceled due to nuclear energy costs, hidden green taxes and new taxes introduced by the energy regulator, it has been claimed.
In last week’s Budget the chancellor promised to cut household bills by £150 by scrapping the Energy Company Obligation (ECO) scheme.
During the election, Labor promised to cut bills by £300 by investing in green energy, but this has yet to happen.
But former Labor donor and green entrepreneur Dale Vince claimed the impact of paying to build nuclear power capacity would largely negate the £1bn cost in the first year and £150 on the ongoing costs of nuclear power.
Further analysis shows that under plans announced by Ofgem, taxes on bills to fund gas pipelines and the high-voltage electricity grid will rise from £222 to £40 a year in April, when the government’s £150 cut comes into force.
Duties are expected to rise over the next four years, reaching £338 per year by April 2030, according to Ofgem’s impact assessment.
Meanwhile, the Office for Budget Responsibility (OBR), in its report with the Budget, revealed that £1 billion a year will be added to household energy bills to fund energy secretary Ed Miliband’s next auction for renewable energy projects, known as the “7th allocation round” (AR7).
The concerns are that energy bills will increase rather than household bills decreasing by £150.
Mr Vince said Independent The Chancellor’s much-publicized £1bn energy bill savings will be completely wiped out by the costs of the Sizewell C nuclear project, costs the government is forcing households and businesses to pay years before construction begins.
He said the £150 discount was due to Sizewell C.
He said: “The Chancellor’s energy savings will be wiped out overnight by the cost of Sizewell. From November the government has decided to put the financial risk of this project directly onto our energy bills before a shovel hits the ground. “And this is not a one-off charge.
“We will subsidize Sizewell for at least 10 years, maybe longer, nuclear projects are always delayed, and we may still be paying the price for decommissioning well into the 22nd century.
“Imagine you order a car and the dealership starts charging you before you even set up the factory—that’s what’s happening here.
“EDF says Sizewell will be ready in 2035, but Hinkley Point is 14 years late and has gone from £18bn to £46bn. Sizewell won’t cut bills or help us get to Net Zero on time – but it will cost us years.”
He claimed the extra cost for a small hair salon would be at least £35 and rise to £140.
The tax applies to every home and business connected to the UK grid, excluding Energy Intensive Industries which are only formally exempt. Ofgem confirmed that £1.4bn of income was allowed for the first payment period (4 November 2025 to March 2027).
But the government disputed Mr Vince’s figures.
A DESNZ spokesman said: “This claim is false. Sizewell C will add an average of £1 a month to home bills during construction, which is a small fraction compared to the £150 average cost of home energy bills in April announced in the Budget.”
“We are living the golden age of nuclear, securing thousands of good, skilled jobs and billions of dollars in investment.
“Sizewell C will provide clean electricity to the equivalent of six million today’s households for at least six decades. Analysis shows the system could save £2bn a year on a future low-carbon electricity system once operational, resulting in cheaper energy for consumers.”
