Tony Blair’s think tank joins calls for £300 cut in energy prices ahead of Budget
Tony Blair’s think tank has stepped up its objection to the Labor government’s energy policy after a new report warned bills should be cut by as much as £300.
The Tony Blair Institute (TBI) has criticized Ed Miliband’s push for net zero policies after concerns were raised in a report by the Energy Crisis Commission.
The commission, which brought together representatives from Energy UK, the Confederation of British Industry (CBI), Citizens Advice and National Energy Action, warned the government must tackle high electricity prices and increase insulation in the upcoming budget.
The group said the transition to electrification would stall unless meaningful action was taken to reduce bills for both households and businesses.
Electricity prices in the UK remain among the highest in Europe after Russia’s invasion of Ukraine in 2022 sparked an energy crisis.
But concerns have been raised before that Mr Miliband’s hardline stance against fossil fuel use during the transition is keeping energy bills high.
In a foreword to an earlier TBI report, Sir Tony warned that climate policy had become disconnected from “political, public and economic reality”.
Reacting to the commission’s findings, TBI’s senior energy policy advisor Tone Langengen said: “The Energy Crisis Commission is right to say costs need to be cut; the government has promised to cut electricity bills by up to £300, but on the current path the opposite will happen. “We are in a cost-of-living crisis; families cannot afford a clean energy plan that is driving up prices.
“But we can’t just shift costs, we need to reform the system. That’s why TBI is calling on the government to overhaul the electricity market to attract investment and reduce bills, including regional pricing that will save the public up to £55bn by 2050.
“The National Energy System Operator should also be given a new mandate to monitor net zero deployment for cost effectiveness, and control rooms must be AI ready, unlocking billions and making the system more efficient.
“As we remain committed to clean energy and the UK’s net zero target, we must have cheaper, reliable energy to power growth and protect households.”
The Energy Crisis Commission has called for the Budget to be delivered next Wednesday to include details of how the government will reduce the gap between electricity and gas prices to advance the transition.
The government said it should consider reviewing policy costs that help pay for renewable energy projects and social schemes as part of efforts to save households money.
Currently policy costs are paid through household bills, but the group said ministers should consider shifting some of these taxes from utility bills to general taxation or distributing them more evenly between gas and electricity bills.
CBI chief economist Louise Hellem said: “The UK’s energy crisis remains a specter on the cost of doing business, with highly unstable energy prices a persistent drag on business investment.
“Accelerating the energy transition is vital for both national energy security and mitigating the effects of climate change.
“This is a decisive strategic economic opportunity for the UK and must be the backbone of a competitive, resilient economy in an uncertain world.
“This will not happen unless there is a solution to high electricity prices.”
Gillian Cooper, energy director at Citizens Advice, said: “With energy bills still much higher than before the crisis and millions in energy debt, Citizens Advice is gearing up for another tough winter to help people heat their homes and keep the lights on.”
Dhara Vyas, chief executive of Energy UK, said: “The government also needs to step in now and help those who have been facing persistently high bills for several years.
“Reducing electricity costs will both alleviate this burden and eliminate serious obstacles to the adoption of clean heat technologies.”
Adam Scorer, chief executive of National Energy Action, said: “For millions of people, the energy crisis was not a single market event. It was a worsening of a terrible norm and confirmation that a warm home will remain a false hope.”
A Treasury spokesman said: “We do not comment on budget speculation. We recognize energy costs are a key concern for households and this government is taking decisive action to tackle this issue, including extending the Warm Homes Sale and providing funding to help make thousands of low-income homes warmer and more energy efficient.”
