Costs of £1bn a year to fund renewables projects were not outlined in the Chancellor’s Budget

Households face paying billions more in energy bills to fund green subsidy costs that were not outlined in Rachel Reeves’s Budget last week. The Telegraph has the story.

The Office for Budget Responsibility (OBR) revealed in its latest economic assessment that £1bn a year will be added to household energy bills to fund Ed Miliband’s next auction for renewables projects, known as “allocation round 7” (AR7).

Costs of the scheme were not outlined in the Chancellor’s Budget. Instead, they were revealed in a footnote to the OBR’s Fiscal Outlook report released on the same day.

The revelation will cast doubt on Ms Reeves’s claims that Labour is bringing down the cost of living. It also comes amid a clash between the OBR and the Chancellor about whether she told the truth about the state of the public finances in the run-up to the Budget.

The OBR’s disclosures relate to contracts for difference (CfD), the system under which levies are added to household bills to finance subsidies for green energy projects, including wind, solar and nuclear.

The OBR forecasts that CfD costs are set to rise from £2.3bn in 2024-25 to £4.6bn by 2030-31. However, it warned that the Treasury’s estimates excluded an additional £5bn for AR7 and subsequent subsidy rounds.

Read the full story here.