British households will benefit from proposals that will be worth £50 on average, as government plans to reduce the impact of energy company price rises.

While the government cannot control the price of energy in the global market, it can help bill-payers by reducing the impact of social and environmental programmes on their bills.

Government confirmed on 2 December it will reduce the current cost of levies by:

This builds on the help given to ‘hardworking’ families through income tax cuts, the council tax freeze and the fuel duty freeze.

“Energy bills are a big concern for many people, which is why we’ve been working to reform the energy market, increase competition and make it easier for people to shop around and switch supplier. Today’s announcement confirms a serious, workable package which would save households around £50 on average,” said Energy & Climate Change Secretary Edward Davey.

In addition, electricity distribution network companies are willing to take voluntary action to reduce network costs in 2014/15. This would allow a further one-off reduction of an average of around £5 on electricity bills, which energy suppliers will be able to pass on to their customers as well.

All of the major energy suppliers have confirmed that they will pass the benefits of this package to their customers. The reduction in individual household bills will depend on the energy supplier. Some companies have not yet announced price rises for 2014, or have limited their rise until the government’s review of green levies concluded. Others have announced price rises and have indicated that they will reduce their customers’ bills as a result of these changes.

The value of the benefit will vary between companies, but, on average, this package, including VAT, will be worth £50 to households, compared to what would have happened without these changes.

The government will also ensure that its overall approach is carbon neutral, with new measures that will boost energy efficiency even further by introducing new schemes for home-movers, landlords and public sector buildings, worth £540 million over three years.

In future, when people buy a new home, they could get up to £1,000 from the government to spend on important energy-saving measures – equivalent to half the stamp duty on the average house – or up to £4,000 for particularly expensive measures. The scheme will be available to all people moving house including those who don’t pay stamp duty, helping around 60,000 homes a year, over three years.

Government will also introduce a scheme to support private landlords in improving the energy efficiency of their properties, which will improve around 15,000 of the least energy efficient rental properties each year for three years. Together, the homebuyers and private rental schemes will be worth £450 million over three years.

Around £90 million over three years will be spent improving the energy efficiency of schools, hospitals and other public sector buildings.

The government will also increase the funds available to local authorities this year through Green Deal Communities from £20 million to £80 million, to help support ‘street-by-street’ programmes for hard-to-treat homes in a cost-effective way, and will keep the Green Deal cashback scheme open, which will protect jobs in the energy efficiency industry before the new measures take effect.

In order to provide investor certainty at a time when the UK needs unprecedented investment in energy security, levies providing support for existing low carbon energy projects will not change, such as the Renewables Obligation (RO), Contracts for Difference (CfDs) and feed in tariffs (FITs). Without this investment, energy security would be jeopardised as Britain would become ever more dependent on imported oil and gas, and energy bills in the future would be increasingly subject to high and volatile fossil fuel prices.