Electricity bill update as ministers slammed for making 'no progress'

Ministers need to do more to ensure people see the benefits of climate action in their bills, the Government’s independent advisers on climate change have warned. The Climate Change Committee (CCC), which has released its first assessment of the new Government’s progress on reducing emissions, said making electricity cheaper will help people feel the benefits of the green transition.

Professor Piers Forster, the interim chair of the CCC, said: “The UK can be proud of our progress in reducing emissions. We’ve cut them by over 50% since 1990. Our country is among a leading group of economies demonstrating a commitment to decarbonise society. This is to be celebrated: delivering deep emissions reduction is the only way to slow global warming.

“However, the Government needs to do more to ensure people see the benefits of climate action in their bills. Given increasingly unstable geopolitics, it is also important to get off unreliable fossil fuels and onto homegrown, renewable energy as quickly as possible.

“The fossil fuel era is over – cheap, clean electricity is our future.”

The report, released on Wednesday, added that making bills cheaper will boost the uptake of clean electric technologies like heat pumps and electric vehicles.

It added that its first recommended action last year to make electricity cheaper “has not yet seen any progress”.

This is despite the Government acknowledging that the high price of electricity compared to gas means that the incentives are not yet good enough for all consumers to switch to low-carbon technologies.

The CCC said: “When people and businesses switch to electric technologies, they are paying more than the actual cost of supplying the extra electricity they demand, because of policy decisions taken many years ago.

“Removing policy costs from electricity would ensure the underlying cost-savings of switching to efficient electric technologies are captured by households and businesses, encouraging take-up. The Government has made no clear progress on removing policy costs since the election.”

The CCC also warned that pollution from flights now outstripped the emissions from generating electricity in the UK and aviation’s climate impacts must be reflected in the cost of flying.

Continued growth in aviation emissions could put the UK climate targets at risk, and measures such as increasing the cost of flights, levies for frequent fliers or curbs on airport expansion could be needed to reduce pollution, the committee said.

It comes as the Institute for Fiscal Studies (IFS) warned that the tax system is making net zero more costly than it has to be.The Government has committed to achieving net zero carbon emissions by 2050.

The IFS said the current tax system imposes "wildly" different effective tax rates on emissions from different sources.Households are facing a higher effective tax rate on emissions from electricity than from gas, which discourages them from switching to heat pumps, it said.

Bobbie Upton, research economist at IFS, said: "The tax system has a crucial role to play in reducing emissions and achieving net zero as painlessly as possible. Unfortunately, the current design of the tax system taxes emissions from electricity far more than emissions from gas, meaning households and firms are incentivised to prioritise cutting down on electricity, even when there are cheaper ways to cut down on gas.

"Much of the tax gap between electricity and gas comes from the choice to fund green subsidies through taxes just on electricity, instead of a tax on all energy sources, for example. If the government wants to help households and firms with the costs of net zero, rethinking these taxes on electricity would be a good first step."

Researchers at the CCC also noted that positive progress has been made in “key” areas because of policies announced under the previous Tory government.

This includes a rise in new car electric vehicle market share (19.6% in 2024), heat pump installations (up 56%) and woodland creation (up 59%).

Over the last year, the UK has made progress on reducing emissions.

Emissions fell 2.5% in 2024, the tenth consecutive year of sustained reduction in emissions, excluding the Covid-19 pandemic years 2020 and 2021.

In its report, the CCC said: “The UK should therefore be proud of its place among a leading group of economies demonstrating consistent and sustained decarbonisation. In the UK, greenhouse gas emissions have more than halved since 1990, with the pace of reduction having more than doubled since the introduction of the UK’s Climate Change Act in 2008.

“Previous UK Governments invested in low-carbon technologies in their early, relatively expensive stages. Now we have the opportunity to build on these early investments and realise the benefits of falling costs.”

Energy Secretary, Ed Miliband said: "This report highlights the significant progress that this Government has made to reduce emissions over the past year, which is the best way to deliver energy security for Britain with homegrown, clean power that we control so we can bring down bills for good.

"This Government has delivered the most significant investment in clean homegrown power in history- cutting bills for 200 schools and 200 hospitals, making planning decisions equivalent to powering 2 million homes, setting up publicly owned great British Energy, sparking a new golden age of nuclear power, and bringing in new plans to upgrade millions of homes to cut bills for homeowners and renters.

"The only way to get bills down for good is by becoming a clean energy superpower and we continue to work tirelessly to deliver clean power for families and businesses.”