Energy Secretary Ed Miliband said the measures are designed to bring down costs “for good” as families continue to struggle with high bills.
“We don’t think it’s fair,” he told BBC Breakfast, referring to how gas prices currently drive electricity costs. “We want to do everything we can to get a better deal for consumers.”
He added: “This is all about what we can do to help people with the cost-of-living crisis that people are facing.”
Under the plans, ministers will try to weaken the influence of volatile global gas markets on UK electricity prices – a system that currently leaves households exposed to sudden spikes.
Prime Minister Keir Starmer said: “We need to get off the fossil fuel roller coaster – this will make energy bills more stable and take the pressure off family budgets.
“When global gas prices spike, people here shouldn’t be picking up the tab.”
The reforms come as energy costs remain high and another price cap change looms in July, when fixed deals for many households end.
Extra help for households hit hardest
The Government also confirmed bigger grants for households using expensive fuels like heating oil and LPG – which are not protected by the energy price cap.
Grants to install heat pumps under the boiler upgrade scheme will rise from £7,500 to £9,000 for these homes.
Officials say the move will help rural households cut bills and gain more certainty over energy costs after heating oil prices surged earlier this year.
Simon Francis said: “Heating oil and LPG customers have been among the hardest hit by the current crisis.
“The three million households relying on these fuels sit outside the energy price cap and have no equivalent protection when global prices spike.”
He added the increased grant is “very welcome” but warned more support may still be needed for households unable to afford upfront costs.
Ed Miliband live speech at National Growth Debate
https://t.co/TMEWY5tHgW— Department for Energy Security and Net Zero (@energygovuk) April 21, 2026
Breaking the gas price link
The Government will also increase a windfall tax on electricity generators and push older renewable and nuclear providers onto fixed-price contracts.
Chancellor Rachel Reeves said: “Hard-working British families and businesses should not bear the brunt of global gas price shocks while electricity generators are making exceptional profits.”
She added the changes will “help to break the link between high gas prices and high electricity prices – offering households and businesses stronger protection against future energy shocks.”
Richard Neudegg, director of regulation at Uswitch.com , adds: “Household electricity bills can be held hostage by market gas prices because of how the wholesale market works, which can cause real pain in periods of market shock, which we have seen during global conflicts like Ukraine and now Iran.
“Weakening and eventually breaking the link between the cost of gas and the price we pay for electricity is an important goal for the government, but that doesn’t mean it will be easy or quick to do.”
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Long-term plan to cut bills
Miliband said the reforms are part of a wider shift away from fossil fuels to protect households from global crises.
“As we face the second fossil fuel shock in less than five years, the lesson is clear,” he said. “The era of fossil fuel security is over… clean energy security must come of age.”
“That’s why we’re doubling down on clean power… to bring down bills for good.”
