Westminster Unveils Policy Change to Cut Energy Bills

Thursday, 12 December 2013

The government has announced a plan that means key energy firms will need to cut their prices – a welcome thought for people up and down the country as the cold starts to bite and winter gets fully underway.

Despite the promising start, however, it seems these plans might not make a big difference to customers' wallets. British Gas will be reducing bills by £53 – a small dent in the £123 average their prices rose year-on-year for customers using their gas and electricity two months ago.

With the cold winter predicted, the possibility of pipes becoming frozen and bursting is greatly increased. The best home insurance cover will protect your buildings and contents from water damage caused by burst pipes – but the prospect of having no heating as temperatures plummet is still a worrying one.

While any price reductions feel like a step in the right direction, the sense that these efforts are only skin deep is reflected by the fact that cuts will be funded by tax money. £500 million of taxpayers' money will go towards providing more energy efficient homes – a scheme that would have previously been paid for by energy companies, who are now recuperating the costs of the price reductions by reducing funding for schemes like the Energy Companies Obligation (ECO).

The ECO has required that companies plough resources and money into helping 400,000 UK households make energy saving improvements each year, but now this scheme will be funded by the public, leaving customers disgruntled that the price cuts seem to be coming from their own pockets.

It’s perhaps a disappointing conclusion to a saga that could have led to a great result for homeowners and tenants who have been feeling the sting of rising prices for quite some time now – though as far as price cuts go, some would argue that every little helps.

Sources:
1. http://www.cityam.com/blog/1385972231/british-gas-cut-average-bill-53-back-government-energy-changes
2. http://www.express.co.uk/news/uk/437407/Heat-or-eat-Fury-as-British-Gas-hikes-energy-prices-by-123-for-8million-homes
3.
https://www.gov.uk/government/policies/helping-households-to-cut-their-energy-bills/supporting-pages/energy-companies-obligation-eco

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