Andy Burnham is reportedly considering a radical plan that could slash household energy bills by £130 a year, according to proposals developed by the thinktank Nesta. This move, if adopted, could also make running a heat pump a more cost-effective option than a traditional gas boiler, a significant shift for many UK households.
The Proposed Shake-Up: How It Works
The core of this proposal involves two main changes to how your energy bill is calculated. Firstly, it suggests a fundamental alteration to how household gas is charged. Secondly, it recommends removing certain policy levies that currently appear on your energy bill.
These levies, which often fund renewable energy initiatives, would instead be moved to general taxation. This means the cost would be covered by the taxpayer rather than directly through your energy supplier's bill. The aim is to simplify bills and reduce the direct cost burden on consumers.
Potential Savings and Costs
For the average household, the plan could mean a saving of up to £130 on their annual energy bill. This is a tangible figure that could make a difference to household budgets, especially during ongoing cost of living pressures.
However, this saving doesn't come without a cost. The proposal is estimated to cost the taxpayer approximately £3.2 billion a year. This figure would cover the shortfall created by removing the levies from energy bills and reallocating them.
Boosting Heat Pumps
One of the key objectives of the Nesta proposal is to make low-carbon heating solutions more attractive. By restructuring energy charges, the plan aims to make running a heat pump cheaper than a gas boiler. This could be a significant incentive for homeowners considering a switch to more environmentally friendly heating systems, potentially reducing upfront cost concerns over running expenses.
What this means for you
While this plan is still under consideration, it highlights a potential shift in how energy costs are structured. For now, the most practical step is to continue monitoring your energy usage and comparing tariffs, as any changes from this proposal would not be immediate. If implemented, the £130 saving could free up funds for other household expenses or savings.
But there are risks
While the prospect of lower energy bills is appealing, the proposal is not without its critics and potential challenges. The estimated £3.2 billion annual cost to the taxpayer raises questions about how this will be funded and its broader impact on public finances. Shifting costs from energy bills to general taxation means that while direct energy costs may fall, the burden is still borne by the public through other means.
Furthermore, Andy Burnham's broader energy stance has drawn attention, with reports suggesting he risks a Labour backlash if he were to reverse a ban on new oil and gas drilling. This indicates the complex political landscape surrounding energy policy decisions.
What happens next
As of 2026, this remains a proposal under consideration by Andy Burnham. There are no immediate changes to how your energy bills are calculated or any specific actions you need to take right now in response to this plan. UKPulse will continue to monitor developments and provide updates as soon as any concrete decisions are made or timelines are announced.
Where to get help
If you are currently struggling with your energy bills, it's important to remember that help is available. Consider contacting your energy supplier directly to discuss payment plans or support options. Independent organisations such as Citizens Advice or National Energy Action can also provide free, impartial advice on managing energy costs and accessing financial assistance.
Sources
- The Guardian — Andy Burnham considers radical shake-up to cut energy bills
- Manchester Evening News — Reports Andy Burnham is considering plans that could see energy bills slashed by up to £130 a year
- The Guardian — Burnham risks Labour backlash if he reverses ban on new oil and gas drilling