How much does the cap on household and business energy bills cost?

Government sources say more information will be unveiled in the coming mini-Budget

Big Zero Report 2022

As the government unveils a cap on household and business energy bills, the question remains: how much do these packages cost and who is going to foot the bill for all these reductions?

On Wednesday, the government promised to cap electricity and gas bills for businesses for an initial six months.

A new paper from the Energy Policy Research Group at Cambridge Judge Business School suggests billpayers “deserve an accounting of who benefits from the government’s costly Energy Price Guarantee and whether these profits are stimulating long-term investment in the UK energy sector”.

The authors of the report added: “£150 billion over two years (as the estimated cost of the policy) is a lot of money and no one should write a blank cheque for this kind of additional public expenditure.

“The £150 billion will be paid out to electricity and gas companies. Where will this money go and what effect will it have?”

Liz Truss’ spokeswoman told reporters: “Costs will be set out in the expected fiscal event on Friday.”

ELN approached BEIS for comment – the department did not respond before publication.

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