Ed Miliband demands suppliers pass on ‘every single penny’ of £150 discount to customers

The Labour Government made clear its position that customers on fixed contracts must not miss out on the savings, which are set to take effect from April 2026 under current plans.

Ministers have signalled they expect suppliers to pass on the entire amount to all consumers, regardless of their tariff type. The intervention comes as concerns mount that those who signed up to fixed deals could be excluded from the cost-of-living relief.

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Chancellor Rachel Reeves announced the measure as part of her efforts to tackle living costs, with typical households seeing their energy bills fall by £150 on average from the spring.

Speaking during last week’s Budget statement, the Chancellor said: “I can tell you today that, for every family we are keeping our promise to get energy bills down and cut the cost of living with £150 cut from the average household bill from April next year. Money off bills, and in the pockets of working people. That is my choice.”

The saving will come through abolishing the Energy Company Obligation (Eco) scheme, a programme established by the previous Conservative Government.

Ms Reeves argued the Eco scheme had been adding £1.7billion annually to household energy costs across the country.

By removing this obligation from suppliers, the Government aims to deliver direct financial relief to families struggling with energy expenses.

The scheme’s scrapping represents a significant shift in energy policy from the approach taken under the Tories.

In his letter to suppliers, Mr Miliband wrote: “This Government has made a clear commitment to cut people’s bills and help ease the financial pressure on millions of families, as we know energy costs cause such anxiety for many people, and that is why we are acting now.”

“As we move forward, we want to set out our clear expectation that every single penny of our intervention at this Budget is passed onto consumers, including those on existing fixed term tariffs.”

The Energy Secretary noted that approximately 37 per cent of the market currently holds fixed-term contracts, stating the Government is “clear that they must benefit from this reduction in bills”.

Mr Miliband urged suppliers to collaborate with his department to deliver the savings, adding: “This close, joint working will be both welcomed and reassuring for customers, demonstrating our shared commitment to fairness and consumer protection.”

Fixed tariffs lock in unit rates and standing charges for the duration of a contract, typically lasting a year or more.

Variable tariff customers, by contrast, see their rates fluctuate in line with wholesale market prices without any set timeframe.

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Ofgem data reveals roughly 21 million domestic energy accounts are currently on fixed deals, while approximately 34 million remain on standard variable tariffs.

Adam Scorer, the chief executive of Energy Action UK, shared: “By scrapping the ECO scheme with no successor and no Warm Homes Plan yet in sight, the Treasury has removed the only national scheme focused on fuel poor homes, outside of the social housing sector. Until the government’s Warm Homes Plan is released, there now isn’t a plan for how to end fuel poverty.

“It’s clear ECO needed a hard reform. It was the government’s responsibility to do the work needed to make sure it benefited the millions condemned to living in cold and unhealthy homes. It has chosen to do the easy thing instead and scrap it entirely.

“Everything will now rest on whether the Warm Homes Plan develops into a genuine, national programme to lift low-income households out of fuel poverty. Without large-scale retrofit of our leaky homes, there is simply no route to ending fuel poverty in the long term.”