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Kemi Badenoch, the leader of the Conservative Party, has emphasized that reducing taxes on energy bills should be the government’s initial step before contemplating any direct financial assistance to households. Speaking on the BBC’s Sunday with Laura Kuenssberg show, she explained that while direct payments could help, they come at a cost, specifically through increased taxes. She stopped short of dismissing the possibility of direct support if energy prices soar dramatically.
Currently, the disruption of the Strait of Hormuz by Iran—a crucial route for global oil shipments—has triggered sharp rises in wholesale oil and gas prices. While energy bills for many in England, Scotland, and Wales are set to decrease under Ofgem’s upcoming quarterly price cap update in April, costs are expected to climb in the months that follow due to these tensions. Badenoch expressed a desire for government measures that would ease the financial burden on all households by cutting taxes on energy bills rather than targeting assistance exclusively at benefit recipients, an approach she criticized for unfairly increasing taxes on others.
The Conservatives have also vowed to remove green levies, such as the Renewable Obligations Certificate and the Carbon Tax, from energy bills. These levies currently support renewable energy projects. Addressing concerns about direct payments, Badenoch remarked, “I’m not ruling out anything. What I’m saying is let’s start off with taking the taxes [off].” She further cautioned against ignoring the financial ramifications of extensive bailouts, recalling the rise in interest rates following government interventions during the Covid-19 pandemic and during Prime Minister Liz Truss’s administration, which provided universal energy bill support after Russia’s invasion of Ukraine.
In addition to tax relief efforts, Badenoch highlighted Conservative calls to increase domestic oil and gas production in the North Sea and eliminate the windfall tax imposed on energy companies. While acknowledging that these measures wouldn’t immediately reduce household bills, she suggested that revenues generated from expanded drilling activities could fund subsidies. This stance contrasts with government restrictions on licensing new North Sea oil and gas fields, though officials have maintained that fossil fuels will remain part of the UK’s energy strategy for the foreseeable future. Meanwhile, voices such as Education Secretary Bridget Phillipson advocate for transitioning away from fossil fuel dependency toward more investment in domestic renewable energy. Criticism also came from Reform UK’s Zia Yusuf, who blamed previous Conservative administrations for raising taxes on North Sea drilling and introducing green levies, describing their current promises as disingenuous
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