UK election dominated by falling energy bills

Britain’s energy regulator has announced a drop in household bills starting in July, bringing a key cost-of-living issue into the spotlight during the second day of general election campaigning.

Ofgem, the regulator, revealed that the cap on energy bills for most UK households will decrease by seven percent due to falling wholesale costs. However, the new cap is still higher than it was before the Covid-19 pandemic.

Starting from July 1, the annual amount suppliers can charge an average household for electricity and gas in England, Scotland, and Wales will be reduced to £1,568 ($1,990) from £1,690. This follows a previous reduction in April.

The announcement comes shortly after Prime Minister Rishi Sunak called for a general election on July 4, with the governing Conservatives currently trailing behind the main opposition Labour party in polls.

– ‘Welcome news’ –

Conservative ministers have welcomed the price drop, claiming it as evidence of Sunak’s efforts to improve the UK economy. Critics, however, argue that it is more due to market forces than government policy amid ongoing cost-of-living challenges.

Energy minister Claire Coutinho stated that this reduction is the second largest in history and described it as “really welcome news.” She also highlighted that gas prices in the UK are now lower than in other European countries and hopes that bills will continue to decrease.

The new price cap is expected to be around £500 lower by July 2023, but it remains significantly higher than in 2021 due to rising oil and gas prices following the conflict in Ukraine.

If Labour wins power, they plan to establish a publicly-owned clean energy company called Great British Energy, aiming to further reduce energy bills for consumers.

Labour leader Keir Starmer acknowledged that many people are still struggling with the cost of living while campaigning in Scotland.

Sunak’s term as Prime Minister has been plagued by high inflation, although recent data shows a slight decrease in the rate of price rises. This week, UK annual inflation was higher than expected due to the country’s economic recovery from recession.

Additionally, UK retail sales saw a decline of 2.3 percent last month as rainy weather deterred shoppers from physical stores.

– ‘Small comfort’ –

Clare Moriarty, chief executive of consumer rights group Citizens Advice, noted that while the fall in the energy price cap will reduce bills slightly, many households are still facing financial pressures. She emphasized the need for targeted energy bill support from the government for those struggling to cover essential costs.

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