Labour ‘could slash energy bills by £200 by cutting net zero madness’

Rachel Reeves will outline her budget on Wednesday (Image: Getty)

The boss of British Gas's parent company is urging the Government to fund Net Zero policy costs through general taxation in order to slash household bills by £200 a year. Chris O'Shea, chief executive of Centrica, wants to see the policy change in tomorrow's budget (November 26) so "those with the broadest shoulders bear the biggest responsibility".

The 52-year-old appeared on Sky News and said it was unfair for people to pay for decarbonisation through their electricity bills. He added that funding Net Zero through general taxation "would take about £200 out of people's bills", while he would be "happy to pay more."

As reported by the Daily Mail, Mr O'Shea said: "What we've argued for for many, many years is that the policy costs of decarbonisation which currently sit on energy bills should move to general taxation. That would take about £200 out of people's bills.

"And the reason for that is that general taxation is more progressive, so those with the broadest shoulders bear the biggest responsibility. Whereas on energy bills as they are at the moment, then everybody picks up the same."

He added: "Doesn't matter whether you're very rich or very poor, you pick up the same cost just now. If the Chancellor could do that, she could take just over 10% off electricity bills.

"That would put more money into people's pockets. It would help people that are struggling. So we've called for that for a long time."

He also suggested introducing a new social tariff so "those that can't afford their gas and electricity will pay less, and those that can will pay a bit more".

After being asked whether he would be willing to pay more tax, Mr O'Shea replied: "I think that would apply to both of us, anybody here in the studio.

Chris O'Shea said the move will cut £200 from annual household bills. (Image: PA)

"I think we are fortunate enough to have a well-paid job. I personally would be happy to pay more. I think that's fairer. I believe in progressive taxation. That's why we call for these costs to be put on general taxation."

Meanwhile, the Resolution Foundation has called for a similar move. The think tank is encouraging Rachel Reeves to shift some policy costs from electricity bills to general taxation.

They believe the move would cut bills by around £160 a year. A second think tank, the Institute for Government (IFG), is also calling for the funding of government energy policies to be transferred to general taxation.

Although the move would cut energy bills, the experts pointed out it would result in higher taxes and lower spending. However, it would still benefit those struggling to pay their bills.

Household energy bills are set to rise again by 0.2% from January 1 after Ofgem revealed it would be increasing its price cap. This means that energy bills will increase by around 28p a month for the average household.