Tuesday, December 09, 2025
Labours energy price cut could be swamped by rising costs
The paper says that in her Budget last week, the chancellor promised to take £150 off household bills by scrapping the Energy Company Obligation (ECO) scheme, but the former Labour donor and green entrepreneur Dale Vince has now claimed that the impact of paying for building nuclear energy capacity will largely wipe out the £150 because of the £1bn cost in the first year and ongoing costs for nuclear power:
Further analysis shows that, under plans announced by Ofgem, levies on bills to fund gas pipelines and the high-voltage electricity grid are set to rise £40 from £222 a year in April when the government’s £150 discount is due to come into effect.
The levies are due to rise for the following four years - reaching £338 a year by April 2030, according to Ofgem’s impact assessment.
Meanwhile, the Office for Budget Responsibility (OBR) also revealed in its report with the Budget that £1bn a year will be added to household energy bills to fund energy secretary Ed Miliband’s next auction for renewables projects, known as “allocation round 7” (AR7).
The concerns are that instead of reducing household bills by £150, energy bills will instead rise.
Mr Vince told The Independent that the chancellor’s much-publicised £1bn in energy bill savings will be entirely wiped out by the costs of the Sizewell C nuclear project — costs the government is forcing households and businesses to pay years before construction even begins.
He claimed that the £150 discount is almost identical to the total annual charges that will hit homes and businesses through the Regulated Asset Base (RAB) nuclear levy, created to fund 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 load the financial risk of this project straight onto our energy bills — before a single shovel hits the ground. And this isn’t some one-off charge.
“We’ll be subsidising Sizewell for at least 10 years, maybe longer — nuclear projects always run late. And we could still be paying for decommissioning well into the 22nd century.
“Imagine ordering a car and the dealership starts charging you before they’ve even built the factory — that’s what’s happening here.
“EDF say Sizewell will be ready in 2035, but Hinkley Point is running 14 years late and its price has jumped from £18 billion to £46 billion. Sizewell won’t bring bills down or help us get to Net Zero in time — but it will cost us for years.”
He claimed that the extra cost would be at least £35 and grow to £140 for a small hairdressing salon.
The government of course denies it. But realistically, raising expectations of a cut in bills, when extra costs are being added to them and when many of the factors leading to price rises are out of the government's control is a big gamble.
