Octopus Energy founder tells Burnham he can slash bills by £200 a year – but warns reform will take two years

Households saw their energy bills climb by £221 in July, pushing the average annual electricity and gas bill to £1,862 – and now the founder of one of Britain’s biggest energy firms has told the incoming prime minister he could reverse that rise by almost £200 a year. Greg Jackson, founder and CEO of Octopus Energy, said Andy Burnham had a “golden opportunity” to overhaul the electricity market, introducing a system that would cut the bill of every home and business in the country. The firm said a typical household could save up to £114 a year through market reform, with a further £75 saved if the government shifted levies into general taxation, making higher earners pick up more of the cost. Businesses and industry could save an additional £6bn annually, unlocking total savings of up to £83bn by 2050, the company said. But Octopus warned that reforming Britain’s electricity market would take two years and urged Burnham to act as soon as possible. “It’s clear that market reform was rejected without a Plan B, and that the path we are currently on will see bills rise for years to come,” Jackson said. “Reversing that will put us in line with many OECD countries, cutting costs for everyone without sacrificing clean energy ambitions.” Jackson, a Labour donor and informal adviser to Sir Keir Starmer’s government, has seen his company grow from its inception to a £20bn firm in a decade. His intervention is a major challenge to Burnham, who has pledged to raise growth in every postcode, and comes as energy prices remain central to the government’s war on the cost of living. The recent bill rise was fuelled by soaring global energy costs caused by Donald Trump’s war on Iran, intensified when Iran blocked the critical Strait of Hormuz – a passage through which a fifth of the world’s oil and gas is transported. Octopus also warned that Britain’s electricity market is wasting billions, with expensive gas often setting the price even when cheap renewable power is available. Wind farms are switched off when demand is low, even as gas plants are paid to balance the grid. Meanwhile, Burnham faces pressure on a second front: electoral reform. During the Makerfield by-election campaign, the incoming prime minister pledged: “I am committed to proportional representation.” In May, Alex Sobel, the Labour MP and chair of the All-Party Parliamentary Group for Fair Election, brought an amendment to the Representation of the People Bill calling for a national commission on electoral reform. It garnered the support of more than a quarter of Labour MPs (96) and the signatures of just under 200 parliamentarians from across all parties. How quickly Burnham will move to introduce change remains an open question.