Hollowness of Rachel Reeves’s big promise to energy consumers exposed | Personal Finance | Finance
Ed Miliband looked like a scolded cat after the Budget, and for once the body language told the truth. Labour marched into office promising competence and “serious government”, then delivered the same old Westminster parlour trick: announce a saving for consumers in the Budget, declare victory, and hope nobody notices the bigger numbers marching up behind it. Chancellor Rachel Reeves scrapped the green levies on energy bills to “help families” and lower costs by what she claims will be £150 a year on average. Red Ed had a face of thunder. And within a week, reality has bitten.
Ofgem has now approved a £28bn, five-year investment plan for the energy network – essential work, yes – but work that is forecast to add around £108 back onto household bills by 2031. Reeves will be furious because it exposes the hollowness of her Budget theatre: she can take levies off with one hand, but the system adds charges back with the other. And consumers are left wondering whether anyone in government actually understands how the energy system is paid for.
This isn’t bad luck, it’s bad planning. The National Grid hasn’t had a meaningful upgrade since the 1960s, despite everything changing: how we live, how we work, and what we expect the network to carry.
Yet Labour’s answer is to posture about lowering bills while stumbling into the unavoidable truth that you cannot maintain a grid with just nostalgia and patchwork upgrades.
The truly irritating part is that this investment is precisely what Labour should have been candid about from day one. Instead, they chose the easy headline – “we’ve cut your bills” – and then act shocked when engineers, regulators and simple mathematics don’t buy into their spin.
UK PLC cannot function if we don’t modernise the grid. The question “can Britain afford to keep the lights on?” is not some abstract provocation, it’s what happens when you defer infrastructure for decades and then try to sprint through an energy transition without the wiring.
Yes, the upgrade could bring costs down over time, or at least reduce volatility.
And let’s be blunt, Britain’s energy bills aren’t just high because of “legacy issues”. They stay high because of political choices. An over-reliance on gas, nowhere near enough storage, and a pricing sensitivity that leaves us exposed to market shocks far more than many European neighbours.
Scrapping levies doesn’t change that or bring resilience to the system.
What Labour needs now is not another announcement, another review, another slogan. It needs a strategic energy plan with teeth and an honest explanation of who pays, when, and why.
Because if the best they can manage is a Budget bill cut followed by a post-Budget bill hike, they’re not governing, they’re campaigning – and we’re the ones funding the leaflets.
Samuel Mather-Holgate is an Independent Financial Adviser at Swindon-based Mather and Murray Financial
