The Liberal Democrats have proposed a new energy policy that would provide all households with a discounted basic energy allowance, with extra support for those most in need.
Under the plan, every home would receive an "Essential Energy Allowance" at a reduced price, covering enough energy for basic needs. Families with more children and households on low incomes or with additional requirements, such as charging an electric wheelchair or running a home ventilator, would receive an additional allowance.
Deputy Leader Daisy Cooper called the current situation a "national scandal where millions can't afford the most basic energy they need." She estimated that the policy would save the average household £100 per year, while the poorest 20% of families would save an average of £140 annually.
The party intends to fund the scheme by ordering energy regulator Ofgem to reclaim approximately £5 billion in what they describe as excess profits expected from energy firms by 2028. Cooper accused domestic suppliers of operating "as total monopolies" and argued that the regulator should force them to repay windfall gains.
Additional measures include free home insulation and heat pump installation for low-income families, removing green levies from household bills (funded instead by a targeted windfall tax on banks), and breaking the link between electricity and gas prices to boost renewable generation.
The Liberal Democrats claim these combined actions could reduce average bills by £900 per year by 2035.
The proposal comes as wholesale energy prices rise following the war in Iran, and the energy price cap is set to increase on July 1. The government has already removed green levies from bills, saving the average household £150 per year, and Chancellor Rachel Reeves has indicated future help will be targeted based on income.
Other parties have also put forward energy proposals: the Conservatives have called for a three-year VAT removal on bills, Reform UK has promised to scrap VAT and green levies, and the Green Party has urged the government to prevent the July price rise.