Electricity pylons near Barking Power Station in east London
Britain unveiled a shake-up of green levies on energy bills on Monday, sparking modest price cuts as it sought to defuse a row over the high cost of living.
The Conservative-Liberal Democrat coalition government confirmed in a
statement that it would curb its scheme that provides free home insulation to low-income households.
It will also provide a rebate for energy suppliers to cover the cost of a levy that supports people who cannot afford to heat their homes.
The announcement comes ahead of Thursday's budget update from finance minister George Osborne, who had already signalled the changes on Sunday.
"British households will benefit from proposals that will be worth £50 ($82, 61 euros) on average, thanks to government plans to reduce the impact of energy company bill rises," said a statement from the Department of Energy and Climate Change.
"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."
Ahead of the winter, five of Britain's 'Big Six' energy providers have hiked their prices, citing both the impact of green levies and soaring wholesale energy prices.
However on Monday, Centrica's British Gas division and Scottish & Southern Energy both said they would now cut the average annual bill of a dual-fuel customer -- taking both electricity and gas -- by about £50.
Rival Npower said it did not plan to increase prices before spring 2015, unless there are increases in wholesale energy costs or network charges.
Ed Miliband, leader of the main opposition Labour party, has pledged to freeze domestic energy prices for 20 months if he wins the next general election in mid-2015, as part of efforts to combat what he calls a "cost of living crisis" in Britain.