Minister for Energy Consumers statement on price cap + Other reactions

Minister for Energy Consumers Martin McCluskey said: 

“We know that energy bills remain too high. That is why we are taking immediate action, with millions more families receiving £150 off their bills through the expanded Warm Home Discount scheme this winter.  

“We are taking the long-term action needed to bring down bills for good with the government's clean power mission. We are also delivering our new golden age of nuclear, with cheaper, clean electricity to power millions of homes, kick-start economic growth and create thousands of jobs.” 

Background:  

• Wholesale costs are the single largest component of energy bills. 

• Over a third of customers are now on fixed tariffs, according to Ofgem's latest research. Shopping around for a fixed tariff and off the price cap could save consumers money off their bills.  

• Any changes to the price cap are felt on a monthly basis – not yearly – and the price cap is updated every quarter.  

• The Chancellor will set out further steps to help families with the cost of living at the Budget. 

Conservative Party

• Ofgem's Energy Price Cap has risen again to £1,758 for the period between January and March 2026, a £190 increase since the election, and Labour's policies are keeping it there
• Ed Miliband's Carbon Tax, green levies, and subsidy bonanza are hammering families and crippling British industry
• The Conservative Party's Cheap Power Plan will slash electricity bills by 20 per cent instantly and restore cheap, reliable energy

Today [Friday 21^st November 2025], Ofgem has confirmed the Energy Price Cap has risen again. The price cap will sit at £1,758 going into 2026 and it is Labour's policy choices that are keeping it there.

Labour promised to cut household energy bills by £300, but since taking power, bills have risen by almost £200. Ed Miliband's ideological pursuit of Net Zero at any cost has become the single biggest driver of higher bills. Despite wholesale gas and electricity prices falling, bills are being kept stubbornly high because of the rising cost of Ed Miliband's Net Zero 2030 target to decarbonise the electricity grid. And the situation is set to get worse. Cornwall Insight has warned that the April 2026 cap is forecast to rise by around £75, they attribute this rise to domestic levies, transmission charges and distribution costs climbing sharply.

Despite Ed Miliband's claims that wholesale prices are the reason people's bills remain high, a new report this week revealed that green levies are set to rise by a further £264 by 2030. This comes after bosses from the UK's largest energy suppliers told Parliament that even if wholesale prices fell to zero, bills would still stay the same or rise because of all the extra costs of decarbonising the electricity system, which end up on people's bills. Professor Sir Dieter Helm, one of the country's most respected energy experts, has also echoed the Conservatives' warnings that Ed Miliband's current wind auction, AR7, will lock the country into high energy prices for decades.

Ministers can no longer hide behind global markets. Bills are staying high and rising because of political decisions Ed Miliband is making in Whitehall. High energy prices mean lower growth, weaker industry, and a poorer country. This week alone, ExxonMobil confirmed the shutdown of the Mossmorran chemical plant in Fife, and the Fraser of Allander Institute warned that decline in the North Sea could cost the UK £13 billion by 2035.

Britain does not have to accept this path. We already have some of the cleanest electricity in the world, but it's also the most expensive. The priority for any government must be to reduce people's bills and benefit from the high-growth industries of the future, like AI.

The Conservatives have recognised the full scale of the crisis and have already done the hard work in opposition to set out a serious, credible plan. At Conservative Party Conference, we launched our Cheap Power Plan which will put cheap energy first through four key steps:

1. Axe the Carbon Tax

The Carbon Tax makes up a third of the wholesale price of electricity and makes electricity artificially expensive. It was designed to drive coal off the system, but since we no longer use coal and we need gas as reliable power to keep the lights on, it simply pushes up the price of gas, wind, solar, and nuclear too. Axing the Carbon tax would save the average household £75 on their electricity bills.

The Conservatives are also challenging Labour not to load more costs onto gas, including through new levies or taxes on boilers, which would make heating more expensive and punish ordinary families for trying to stay warm.

2. Scrap Ed Miliband's old wind subsidies (Renewable Obligation)

These lucrative subsidies are paid to wind and solar farms on top of the market price of electricity, meaning some wind farms are receiving up to three times the market price for their electricity – all paid for by consumers on their electricity bills. We are calling on the Government to use primary legislation to repeal this subsidy scheme, which will reduce the average household's electricity bills by £90.

Together, the measures in the Cheap Power Plan would cut electricity bills by 20 per cent for everyone instantly.  

3. Stop Ed Miliband's latest wind auction, AR7

We are also calling on the Labour Government to halt the AR7 wind auction. Experts say that Miliband's current renewables auction will lock Britain into paying higher energy prices for decades. The prices Ed Miliband is set to pay for offshore wind to meet his Clean Power 2030 targets are much higher than the current cost of electricity and significantly higher than the cost of electricity from gas without the Carbon Tax. He has also extended the wind developers' subsidy contracts to twenty years, meaning we will be locked into higher prices for longer. It won't just be us paying these prices, but our children too.

The UK has already halved its emissions since 1990, reducing emissions by more than any other major economy. But global emissions are rising and countries like China are not following our lead. Continuing down this path of higher energy bills, job losses, and lower economic growth will make us a warning, not an example, to the rest of the world. We must put cheap, reliable energy and a stronger economy first.

The Energy Price Cap tells the real story. As long as Labour keeps loading costs onto the system, bills will stay high and families will pay the price. The Cheap Power Plan is the only route to lower bills and a stronger economy. 

Claire Coutinho MP, Shadow Energy Secretary, said:

“Ed Miliband promised to cut everyone's energy bills by £300 but more and more experts are sounding the alarm that his plans will lock us into paying higher bills for decades.

“Despite gas prices falling, independent experts, energy suppliers, and academics say it's the extra costs of Ed's Net Zero targets that are putting upward pressure on bills. This week we had a report that green levies on bills will soar by another £260 by 2030. We simply cannot afford this - cheap energy has to come first.

“Our Cheap Power Plan would cut everyone's electricity bills by 20 per cent in time for winter. Ed Miliband could adopt it tomorrow if he really cared about cutting bills.”

ENDS

Notes to Editors:

Energy bills have gone up under Labour:

·       Labour pledged to cut energy bills by £300, but they are up by £190. Throughout the general election campaign Labour pledged to cut energy bills by £300, but have overseen an increase in energy bills, and have failed to recommit to their pledge now they are in government. The energy price cap for July to September 2024 was £1,568 compared to £1,758 for January to March 2026, a £190 increase (The Daily Mail, 5 September 2024, link; Ofgem, Energy Price Cap, accessed 21 November 2025, link).

·       Cornwall Insight warns the April 2026 cap is set to rise by around £75. Cornwall Insight warn the April 2026 will rise by around £75 due to domestic levies and network charges are climbing sharply, not because of global energy markets. The forecaster says wholesale energy will make up less than 40 per cent of bills for the rest of the decade, meaning government policy costs and transmission charges will be the main driver of higher household bills. (Cornwall Insight, Cornwall Insight Release Final January Price Cap Forecast, 18 November 2025, link).

·       Almost half of the cost of producing electricity in Britain is a result of Net Zero spending, taxes and levies. Research by the Renewable Energy Foundation found that the equivalent of 40 per cent of the cost of producing electricity in Britain, £22 billion a year, is paying for the costs of renewables and Net Zero, including various renewable subsidies, the Carbon Tax, backup for when renewables cannot generate power, paying wind farms to switch off when it's too windy, and the cost of building the pylons required to connect renewables to the grid. All of these costs are recovered through our energy bills. (Renewable Energy Foundation, UK Renewable Electricity Subsidy Totals: 2002 to the Present Day, accessed 26 September 2025, link).

·       The UK's largest energy suppliers have warned that bills would still rise by 2030 even if gas prices plummeted because of the extra costs of Ed Miliband's Net Zero targets. Bosses from Octopus Energy, E.ON and EDF Energy told the Energy Select Committee that bills would still rise even if wholesale prices halved, or stay the same if wholesale prices were zero, because of the rising costs of Government renewables subsidies, network/grid costs, and the cost of balancing the grid. (Energy Security and Net Zero Select Committee, Oral Evidence from energy suppliers, 15 October 2025, link.) 

The Climate Change Act 2008 – passed by Ed Miliband under the last Labour Government – is forcing the UK to reduce emissions by rigid targets, making us poorer:

• The Climate Change Act commits the UK to reducing emissions by rigid targets to achieve Net Zero by 2050, forcing the UK to prioritise climate targets over the economy and the cost of living. The UK's carbon budgets – mandated by the CCA – set a legally binding limit on the UK's greenhouse gas emissions in order to achieve Net Zero by 2050, without flexibility to limit the impact on our economy or the cost of living. (Climate Change Act, accessed 30 September 2025, link). 

The Conservatives will Axe the Carbon Tax, scrap Ed's extortionate wind subsidies, and repeal the Climate Change Act to cut energy bills:

·       The Conservatives will repeal the Climate Change Act 2008. The Climate Change Act established legally binding, five-yearly carbon reduction targets. These policy changes would likely not be possible if we had to stick to our legally binding climate targets under the Act. This is proof that the Climate Change Act forces Ministers to make decisions that increase the cost of energy and make people poorer. (Climate Change Act, accessed 26 September 2025, link).

·       The Conservatives will axe the Carbon Tax for electricity generation, saving families £75 a year. The Carbon Tax (the Emissions Trading Scheme (ETS) and Carbon Price Support (CPS)) will be scrapped for electricity generation. This will reduce wholesale electricity prices by around 30 per cent, or around £26 per MWh, saving households £75 per year on their electricity bills. The ETS and CPS are taxes that are charged on gas power stations when they generate electricity, which are passed straight through to households and businesses in their energy bills. (Conservative Party Analysis of DESNZ data, 26 September 2025).

·       The Conservatives will scrap Ed Miliband's extortionate old renewable subsidies, saving families £90 a year. The Renewable Obligation Certificate (ROC) scheme pays subsidies to wind and solar farms and other renewable generators, who are paid up to three times the market price of electricity. These subsidies are paid by every household and almost all businesses through their electricity bills. The ROC subsidies are reliant on primary legislation, meaning they can be stopped at any point. Scrapping this would save households £90. (Ofgem, Policy cost allowance methodology, accessed 26 September 2025, link).

Labour's Net Zero dogma is devastating industry: 

·       David Whitehouse, CEO of Offshore Energy UK, has warned that 1,000 jobs will be lost every month in the oil and gas industry between now and 2030. WHITEHOUSE: ‘Today, we are seeing skilled jobs being lost on a scale that would be unacceptable in any other sector. Almost 1,000 direct and indirect jobs in the UK oil and gas sector are set to be lost every month between now and 2030. But with supportive government policies, it doesn't have to be this way' (OEUK, Press Release, 18 August 2025, link). 

·       The Fraser of Allander Institute warns that the UK's worsening investment climate for energy could speed up the decline of the North Sea, costing the UK £13 billion in lost economic output by 2035. The report models two scenarios to 2035 and finds that an accelerated decline in oil and gas activity would deepen the economic hit to Scotland by £4 billion, while weakened supply chains, shrinking high-wage tax revenues, and the UK's 78 per cent offshore tax rate risk driving investment overseas. It concludes the UK is ‘not doing enough' to retain jobs, skills, and capital, warning that without a more stable and competitive regime the country could repeat and worsen the post-2015 downturn just as low-carbon opportunities should be scaling up. They argue with the right decisions, the offshore workforce could grow by 40 per cent, but the wrong ones could see it shrink by 20 per cent. (Energy Voice, 20 November 2025, link).

·       ExxonMobil announced the closure of its Mossmorran plant with over 400 jobs lost with Paul Greenwood, UK Chair of ExxonMobil stating the losses were the result of ‘deliberate government policies that are undermining' business. GREENWOOD: ‘We've had windfall taxes, we've had a ban on production licences. I need cheap sources of abundant ethane and I do not them because the North sea because of government policies declining rapidly and that ethane is increasingly high price. If I come to the second part which is I need to operate at low cost I have to have a burden put upon me of CO2 taxes. We paid £20 million last year in CO2 taxes. That will double in the next four or five years. My international competitors do not have those costs. I also have to deal with high energy costs and those kinds of things. So these are deliberate government policies that are undermining us' (BBC Radio 4 Today, 19 November 2025, archived).

• Professor Dieter Helm argues that the Government's entire energy strategy is built on a false narrative that renewables are cheap, home-grown, and secure, when the evidence shows the opposite. Professor Dieter Helm says ministers are locking Britain into decades of high electricity prices by signing long, expensive contracts for intermittent wind and solar, doubling grid requirements, and accelerating the decline of North Sea gas, which forces greater reliance on costly imported LNG and foreign-owned generation. Helm contends that almost none of Britain's future energy system is genuinely home-grown, since turbines, solar panels, minerals, cables, transformers and finance all come from abroad, while domestic nuclear capacity is minimal and shrinking. He warns that energy security is weakened by over-reliance on interconnectors, vulnerable gas imports, and an electricity system that cannot guarantee firm power during low wind periods. The result, Professor Dieter Helm argues, is a structurally high-cost, fragile energy system that will drag on economic growth, hollow out industry, worsen the balance of payments, and leave Britain dependent on other countries for both energy and infrastructure. (Professor Dieter Helm, 3 November 2025, link).

·       Chris Norbury, the CEO of EON, said that even if the wholesale price of energy was zero, bills would not fall because of policy costs and network costs being imposed by Ed Miliband. NORBURY: ‘In addition to that, if I look at the non-commodity costs—policy costs and network costs—certainly some of the modelling that we have suggests that you could get to a position by 2030 where, if the wholesale price was zero, bills would still be the same as they are today because of the increase in those non-commodity costs. There are things that we can do there. We can move some of those non-commodity costs, particularly the legacy policy costs, feed-in tariff, climate change levy and renewable obligations, off the electricity bill. That would help bring bills down' (House of Commons, Energy Security and Net Zero Committee, 15 October 2025, link).

·       Chris Norbury, the CEO of EON, backed Conservative plans to scrap renewable obligations. NORBURY: ‘In addition to that, if I look at the non-commodity costs—policy costs and network costs—certainly some of the modelling that we have suggests that you could get to a position by 2030 where, if the wholesale price was zero, bills would still be the same as they are today because of the increase in those non-commodity costs. There are things that we can do there. We can move some of those non-commodity costs, particularly the legacy policy costs, feed-in tariff, climate change levy and renewable obligations, off the electricity bill. That would help bring bills down' (House of Commons, Energy Security and Net Zero Committee, 15 October 2025, link).

·       Rachel Fletcher, Director of Regulation and Economics at Octopus Energy, said ‘if we continue on the path that we are on right now, in all likelihood electricity prices for a typical customer are going to be 20 per cent higher in four or five years'. FLETCHER: ‘There are proposals on the table we think Government should be looking at to take gas out of the wholesale market and put it into a strategic reserve. That needs very serious and urgent consideration in the context that Chris has already set out, which is that, if we continue on the path that we are on right now, in all likelihood electricity prices for a typical customer are going to be 20% higher in four or five years' time than they are now. That is even if wholesale prices halve' (House of Commons, Energy Security and Net Zero Committee, 15 October 2025, link).

Energy & Climate Intelligence Unit

Under Ofgem's energy price cap for January to March 2026, the typical dual fuel bill will remain stable (rising by just 0.2% or around 30p) [1] but in real terms will fall by £37 once adjusted for inflation. However, the price cap is expected to rise again in April [2], largely as a result of network costs. Commenting, Jess Ralston, Energy Analyst at the Energy and Climate Intelligence Unit (ECIU), said: "With colder weather setting in, energy bills are still a worry for many. Our electricity system, like our schools, has seen low levels of investment and we're now playing catch-up. To use more of our own power and ensure we're less reliant on foreign gas imports and its price swings, investing in an upgraded power grid is crucial.

"We can't afford a repeat of the energy crisis that cost us over £180bn [3], the equivalent of £6,400 per household. The Energy Crisis Commission [4] has said the Government's promised Warm Homes Plan is important to help the most vulnerable households reduce bills and be warmer and healthier.“

ENDS

Notes to editors: 

1. Ofgem: https://www.ofgem.gov.uk/press-release/energy-price-cap-will-rise-02-january

2. Cornwall Insight: https://www.cornwall-insight.com/press-and-media/press-release/cornwall-insight-release-final-january-price-cap-forecast/ 

3. ECIU and E3G: https://eciu.net/analysis/reports/2025/budget-cost-of-energy-crisis-exceeds-nhs-englands-annual-health-spending

4. Energy Crisis Commission: https://energycrisiscommission.uk/

Unite

In response to Ofgem's announcement of the latest energy price cap, Unite general secretary Sharon Graham said:

“There is no comfort in today's announcement for the millions of people struggling to heat their homes this winter.

“Unite has shown that £500 of every energy bill goes straight to energy company profits. If the government is serious about bringing down bills, it must tackle corporate profiteering. We need to bring back public ownership of our energy system, starting with the grid.”

Last month Unite published its Energy Profiteering report which revealed that the principal reason that UK households have the most expensive energy bills in Europe, is a result of the privatised energy system and company profits. In 2024 energy companies made a total of £30 billion in profits.

The report found that the average household is paying £500 of energy bills to the privateers in company profits. This is at the time that household bills have increased by 42 per cent since Winter 2021.

Profit margins are excessive, with the average profit margin being 23 per cent, rising to an eye watering, 38 per cent, for companies involved in the grid.

Company profits (£30 billion) are a far bigger factor in household bills than green levies which amount to just £9.9 billion.

Unite is calling for the renationalisation of the UK's energy system beginning initially with the grid.