The government does not have a firm estimate for savings on bills, but says it is confident it will save people money.

The plans to weaken the link between electricity and gas prices will be subject to consultation, but the government believes the changes could be in place in about a year’s time.

On Tuesday the chancellor could also announce increases to the so-called windfall tax on electricity generators, which was introduced in 2023. The tax applies to some generators with older renewable energy contracts, who would otherwise make large profits when gas prices spike.

The government hopes that the threat of a tax increase will incentivise these generators to make the voluntary switch to fixed-price contracts, which would not be taxed in this way.

Miliband will also announce plans to amend planning laws to make it easier for those without a driveway to charge electric cars and to enable more businesses to install solar panels.

In response, shadow energy secretary Claire Coutinho accused Miliband of “piling on cost after cost onto people’s electricity bills”, pointing to taxes and levies on bills on top of wholesale prices.

“If we want people to use electricity, then we need to make it cheap,” she said.

Liberal Democrat energy spokesperson Pippa Heylings said the government should act and break the link between electricity and gas prices.

“We have consistently argued that if Britain is generating more and more cheap renewable electricity, households should feel the benefit in lower bills,” she said.

Green Party energy spokesperson Carla Denyer said she was “relieved” to hear the plans but accused the government of being too slow to act.

“It is nearly two years since the election – two years in which they could have prevented a crisis like this rather than just respond to it,” she said.

Plaid Cymru also welcomed the proposed changes but called for the government to go further.

“As long as electricity prices are tied to volatile gas markets, households and businesses will continue to pay the price,” its energy spokesperson Llinos Medi said.

Reform UK and the SNP have been contacted for comment.

Northern Ireland is part of a separate energy market.