Published On: Wed, Jun 25th, 2025
Business | 2,855 views

Ed Miliband sent urgent message over bills as net zero plans slammed | Personal Finance | Finance

Ed Miliband, Secretary of State for Energy Security and Net Zero, is under huge pressure to cut electricity bills urgently – and remove the ‘net zero’ levies that are pushing up household energy costs.

The pressure comes amid concerns his department has made “no progress” on driving down prices over the past year.

The stark verdict came from the Government’s own independent advisers, the Climate Change Committee (CCC), who warned that sky-high electricity prices are deterring families from switching to greener alternatives like electric cars and heat pumps.

Despite a legal duty to reach net zero by 2050, Britain is now languishing at the bottom of the European league table for energy pricing – with a unit of electricity costing almost four times more than gas, the worst ratio on the continent.

The CCC said the soaring cost of electricity, inflated by taxes and green levies designed to pay for old renewable projects and social schemes like the Warm Homes Discount, is actively undermining the UK’s transition to cleaner living.

“By far the most important recommendation we have for the government is to reduce the cost of electricity,” said Professor Piers Forster, the committee’s interim chair.

“If we want the country to benefit from the transition to electrification, we have to see it reflected in the utility bills.”

Currently, the average household with a heat pump pays around £490 a year just in levy costs – despite the fact that heat pumps are up to four times more efficient than gas boilers.

Emma Pinchbeck, the CCC’s chief executive, added: “We’re worried that there won’t just be enough incentive for people who can invest in these [heat pumps and electric cars] to invest in them.”

The Institute for Fiscal Studies echoed the calls, accusing the Treasury of ‘taxing the cleanest energy source more heavily than polluting fossil fuels’.

“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,” said Bobbie Upton, research economist at the IFS.

The warning comes as Labour is pushing a switch to green energy with promises to unblock onshore wind farms, speed up the switch to electric cars, and reduce industrial electricity bills. However, the CCC said ministers have so far failed to take meaningful action on domestic electricity prices – despite a similar warning last year.

“The government has committed to consulting on this, but without any timetable,” said the committee in its annual progress report to Parliament.

While the CCC welcomed the direction of travel under Labour, with emissions down 2.5% last year, it warned that time is running out to give households the financial incentive to go green.

The number of electric cars on UK roads has reached 1.5 million and nearly one in five new vehicles sold this year was fully electric. Sales of heat pumps also jumped by over 50% last year thanks to government grants.

But campaigners say the green transition will stall without bold reform on energy pricing.

Currently, electric vehicles and heat pumps can be cheaper to run – but only if electricity prices fall significantly. The CCC believes the electricity-to-gas cost ratio needs to fall below 3:1 to make widespread adoption feasible.

Dr Emily Nurse, the CCC’s head of net zero, said: “We see these transitions happen surprisingly fast once they get going… falling prices and rising demand reinforce each other.”

Removing green levies from electricity bills and funding them through general taxation instead could knock £200 off the average household’s annual bill, experts say – but it would cost the Exchequer around £6bn a year.

Energy Secretary Ed Miliband insisted the government was committed to tackling the issue. “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,” he said.

Under the former Conservative government, ministers pledged to rebalance gas and electricity costs but twice backed down over fears of being blamed for hiking gas bills.

The public mood on net zero policies appears increasingly divided. While climate experts insist the UK “can absolutely meet net zero by 2050,” political consensus has fractured, with Tory leader Kemi Badenoch calling the goal “impossible” and Reform branding it “net stupid zero”.

Supporters of the target argue that hitting net zero could boost the economy long-term – but only if households see clear benefits, including cheaper energy.

As Professor Forster put it: “If we want to go green, it can’t just be about targets and policies – it’s got to show up in people’s bills.”