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Written question asked by Baroness Ritchie of Downpatrick (Labour) on Wednesday, 10 June 2026, in the House of Lords. It was due for an answer on Wednesday, 24 June 2026. It was answered by Lord Livermore (Labour) on Tuesday, 16 June 2026 on behalf of the Treasury.

Electricity: Taxation

Question

To ask His Majesty's Government what assessment they have made of the economic benefits of moving levies from electricity bills to general taxation for both domestic and non-domestic consumers.

Answer

At last year’s Budget, the Chancellor took the decision to fund 75% of the domestic share of the Renewables Obligation through the Exchequer and ended the levy-funded Energy Company Obligation. These decisions took on average £150 of costs off household energy bills and are forecast to reduce inflation by over 0.2 percentage points in 2026/27.

The Government’s fiscal plans – which factor in the impacts of the Chancellor’s decisions on levies – are bringing down borrowing and debt, keeping the public finances on a sustainable path and supporting the Bank of England to keep inflation as low as possible. According to the IMF, between 2025-2030, the UK will be reducing borrowing more than any other G7 country.

The Government keeps all taxes under review and is introducing a new framework to subject levies to enhanced scrutiny and ensure they are affordable, value for money and do not impose unnecessary costs.

Secondary information

Type
Written question
Reference
HL832
Session
2026-27
Grouped for answer
Yes
Subjects
Billing Electricity Economic situation Prices Taxation
Link
View this Written question on www.parliament.uk